SYDNEY, Feb 23 (Reuters) – The Australian and New Zealand dollars were little changed on Tuesday, hovering near multi-year highs amid surging commodity prices and a weak dollar, while bond yields were steady.
The Aussie dollar is up 0.14% higher at $ 0.7925 after crossing the $ 0.79 mark for the first time since early 2018 the previous day. The currency’s next target is $ 0.80, said the strategist.
The kiwi dollar fell 0.05% against the greenback to $ 0.7324, having stretched as far as $ 0.7343 in the previous session, the highest since April 2018, as yields surged and S&P upgraded New Zealand’s rating to AA +, citing surprising strength from the economy.
Rising prices for materials from oil and copper to wood and powdered milk have pushed currencies such as the Australian and New Zealand dollars to their highest levels in nearly three years.
Copper prices surged above $ 9,000 per tonne for the first time since 2011 on Monday, while nickel traded above $ 20,000 per tonne for the first time since 2014.
“Dividend announcements for Australian mining companies that are likely to declare in US $ and offer payouts in A $, and the prospect of a larger dividend at the end of the year adds to the A $ demand story,” Westpac analysts said in a note.
The ten-year bond yield in Australia fell four basis points to 1.55% on Tuesday after rising sharply in recent days as fears of faster global inflation have hit bond markets.
The three-year bond is up 2 ticks to 99.7550, and the 10-year bond is up 4 ticks 98.4350.
In New Zealand, the 10-year yield was up one basis point at 1.65%, after hitting 1.72%, the highest since March 23 as markets await this year’s first monetary policy meeting on February 24.