SYDNEY, Oct 21 (Reuters) - The Australian dollar rose on
Wednesday after four straight sessions of losses took it to a
three-week trough while its New Zealand peer was also slightly
firmer as optimism over a pre-election U.S. fiscal stimulus
powered risk assets.
The Australian dollar, a liquid proxy for risk,
jumped 0.4% to $0.7075 after going as deep as $0.7021 on
The New Zealand dollar climbed 0.4% to $0.6609.
Risk assets got a boost on news the White House and
Democrats have moved closer to agreement on a new coronavirus
relief package as President Donald Trump said he was willing to
accept a large aid bill.
The Aussie had been on a downward trajectory in recent days
on bets the country's central bank will cut its cash rate
further to 0.1% in November and expand its bond-buying
Earlier, preliminary data on retail sales showed a drop of
1.5% for September on top of a 4% decline in August, suggesting
consumers were paring spending.
However, the quarterly figure was up a solid 6.8% from a
year ago, which means private consumption likely made a positive
contribution to third-quarter gross domestic product growth.
Separate data showed, job vacancies rose by over 6% last
month with gains in each state and territory, though job ads are
still 12.2% below the level in September 2019.
"The recovery path remains bumpy, but the economic recovery
is well underway," said Craig James, chief economist at CommSec.
"There are more jobs to be filled and retail spending remains
"The Reserve Bank is keen on adding momentum to the recovery
with more monetary stimulus. The aim is to get more people back
into work and back quickly," James added.
With risk assets on the rise, safe-haven bonds saw some
New Zealand government bonds fell, with yields up
5-6 basis points at the long-end of the curve.
Australian government bond futures slipped, with the
three-year bond contract down half tick at 99.83. The
10-year contract dropped 5 ticks to 99.19.
(Editing by Sam Holmes)