SYDNEY, Dec 1 (Reuters) - The Australian and New Zealand
dollars were edging higher again on Tuesday, shaking off a bout
of profit-taking as domestic economic news stayed upbeat and
global commodity prices strong.
The Aussie firmed 0.3% to $0.7366, having reached a
three-month peak of $0.7408 overnight only to meet stiff
resistance at the September top of $0.7413. A break there would
take it back to levels not seen since mid-2018.
The kiwi dollar pushed back up to $0.7037, having
already reached its highest since June 2018 at $0.7051. The
currency surged 6% in November and overbought technical signals
point to the need for some consolidation.
Australian economic data were again upbeat with a revival in
house prices and home building boding well for economic recovery
now the nation is largely coronavirus-free.
The Reserve Bank of Australia (RBA) noted the run of better
news while leaving rates at 0.1% after its December policy
meeting on Tuesday.
Having eased policy in November, analysts assume it will be
on hold for at least a few months to see how growth fares.
"The lesson globally has been that activity bounces back
sharply once virus control is achieved and containment
restrictions are eased," NAB economist Tapas Strickland said.
"Encouraging news on vaccine trials suggests the medium-term
outlook for growth will also continue to improve."
Australia's relative economic success has kept 10-year bond
yields up at 0.92%, while U.S. yields have drifted
down to 0.85%, widening the Aussie's rate advantage.
Also supporting the currency has been strength in prices for
some of Australia's major export earners.
"The commodity story remains incredibly supportive for the
A$ with copper, aluminium and iron ore all surging on
expectations of 'green waves' of investment," said Richard
Franulovich, head of FX strategy at Westpac.
However, he cautioned the latest diplomatic brawl with
China could lead to further tariff action by Australia's single
largest export market.
(Editing by Himani Sarkar)