Australia, NZ dollars steady above lows; bonds get some relief

According to Business Recorder, the Australian and New Zealand dollars firmed slightly on Friday as a steep drop in Treasury yields weighed on the greenback and lifted bonds, though both currencies remained close to multi-month lows. The Aussie held at $0.6960, recovering from an overnight trough of $0.6933, while the kiwi was steady at $0.5603 but still 0.2% lower for the week.

US debt rallied hard, sending yields lower from a 24-year summit, easing strains that built over weeks of heavy selling. Australian 10-year yields dropped 6 basis points to 5.345%, moving away from a 15-year high of 5.428%. If the kiwi closes the week lower, it would mark a seventh straight weekly decline.

Attention now turns to Australia's September jobs report due Thursday, after the jobless rate unexpectedly rose in August to 4.6%, a five-year peak. The increase reflected more people looking for work rather than job losses, with employment up 39,500 and the workforce growing by almost 68,000. Westpac economist Ryan Wells said slack is building in the labour market, and a further rise would strengthen the argument against another Reserve Bank of Australia hike after last month's increase to 4.60%. Markets price in roughly a 30% chance of a November rate rise, climbing to 46% for December.