Australia, NZ dollars gain from greenback's bond angst

Business Recorder reported that the Australian and New Zealand dollars stayed close to recent multi-week highs on Thursday. The move followed an unexpected decision by the US Treasury to double the size of its routine buybacks for longer-dated bonds, a step that weighed on the greenback and reflected unease over yields that have risen to 19-year highs.

Australian employment fell by 15,800 in June, while analysts had expected a 15,000 gain, and the jobless rate edged up to 4.5%, near a five-year peak. The Aussie eased 0.1% to $0.7114 after the release, while the kiwi reached an 11-week high of $0.5946 following a 1% overnight gain. Pricing in financial markets shows a 17% likelihood of a hike from the current 4.35% cash rate at the September 29 RBA meeting, while the chance of reaching 4.60% by early next year is as high as 70%.

Capital Economics economist Abhijit Surya said the figures pointed to a softening labour market, though not yet enough for the RBA to abandon its tightening bias. He added that with the jobs market cooling, the central bank was unlikely to lift rates again despite its recent hawkish tone. Australian 10-year bond yields eased to 4.989%, down from a peak of 5.073% reached earlier this week.