SYDNEY/WELLINGTON, (Reuters) - The Australian dollar held firm on Wednesday after hitting a three-month top, while its New Zealand cousin reached the highest in over a year as a rally in global risk appetite lifted commodities and dented the Japanese yen.
The Australian dollar AUD=D4 was consolidating at $0.7590, having jumped 1.2 percent overnight to as far as $0.7650. The bounce recovered all the losses suffered in the wake of Britain's vote to leave the European Union.
The gains were led by a pullback in the safe-haven yen, which saw the Aussie climb 3 percent on Tuesday to top out 80.34 yen AUDJPY=R . It was last at 79.25 and up from 76 at the start of the week.
The Aussie was supported by gains in commodities, including a 6 percent jump in iron ore prices, as investors wagered that more policy stimulus was coming around the world.
Likewise, the New Zealand dollar NZD=D4 got as far as $0.7325 overnight, its highest since May 2015.
It was last at $0.7250 having been weighed down somewhat by comments from a top official at the Reserve Bank of New Zealand.
Assistant governor John McDermott said the bank was paying more attention to a persistent period of low inflation, suggesting there was still a risk it might cut rates again. risk assets back in vogue for the moment, New Zealand government bonds 0#NZTSY= eased in price, sending yields as much as 4 basis points higher at the long end of the curve.
The three-year Australian government bond future YTTc1 dipped 2 ticks to 98.470, while the 10-year contract YTCc1 fell 4 ticks to 98.0050.