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Australian dlr hits near 3-mth peak on trade boom, NZ$ hangs on

Published 02/02/2017, 12:54 pm
Updated 02/02/2017, 01:00 pm
Australian dlr hits near 3-mth peak on trade boom, NZ$ hangs on
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By Swati Pandey

SYDNEY, Feb 2 (Reuters) - The Australian dollar climbed 0.5 percent on Thursday to a near 3-month peak as the country boasted its biggest trade surplus on record in December, led by surging commodity prices.

The Australian dollar AUD=D4 went as far as $0.7631, the highest since Nov.10. It also broke above key chart resistance of $0.7610/20, paving the way for $0.7720/40.

Official data on Thursday showed a trade surplus of A$3.51 billion ($2.67 billion) in December, handily outpacing forecasts of A$2.2 billion. The previous month was also revised up sharply to A$2.0 billion. windfall could lessen the risk of a downgrade to Australia's triple A credit rating and ripple through the economy via higher profits, incomes and tax receipts.

"A record trade surplus shows that the surge in commodity prices is boosting nominal GDP," said Paul Dales, chief economist at Capital Economics.

"The most recent increases in the volume of exports implies that real GDP in the fourth quarter of last year at least may prove to be a bit stronger than we had thought."

The Aussie and its New Zealand counterpart NZD=D4 have had a strong run against the greenback so far this year, surging 6 percent and 5.3 percent respectively.

Meanwhile, the greenback has sagged, with investors becoming increasingly risk averse due to U.S. President Donald Trump's protectionist policies. USD/

The greenback received some support after the Federal Reserve presented a relatively upbeat view of the U.S. economy at its first meeting since Trump took office. the Aussie did well against other currencies. The euro slipped 0.4 percent on the Aussie EURAUD=R , while the pound was off 0.3 percent GBPAUD=R . The Aussie inched up 0.3 percent on the yen AUDJPY=R .

The New Zealand dollar NZD=D4 edged 0.2 percent higher to $0.7295, but still short of a 2-1/2 month high touched earlier this week.

The currency fell 0.5 percent on Wednesday after data showed the country's jobless rate jumped and wage growth remained sluggish, prompting investors to pare back the chance of a rate hike. Zealand government bonds 0#NZTSY= eased, sending yields up about 2.5 basis points at the long end of the curve.

Australian government bond futures fell, with the three-year bond contract YTTc1 down 3 ticks at 98.020. The 10-year contract YTCc1 was off 5 ticks to 97.185. (Editing by Biju Dwarakanath)

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