SYDNEY, July 22 (Reuters) - The Australian and New Zealand dollars were at multi-month highs on Wednesday as surging resource prices and a lurch lower in their U.S. counterpart shattered major chart barriers, sparking a wave of technical buying.
The Aussie was taking in the view at $0.7138 having climbed 1% overnight to a 15-month peak of $0.7147. The sudden surge finally cleared the June top of $0.7069 and opens the way to an April 2019 high at $0.7206.
The kiwi dollar stood at $0.6644 after also gaining 1% overnight to a six-month high of $0.6650. The breach of resistance around $0.6600 opens the door to chart targets at $0.6664 and $0.6755.
The European Union’s landmark agreement on a recovery plan continued to support risk sentiment.
“The deal marks a significant step towards European fiscal solidarity which is positive for the European and global economic recovery,” said CBA economist Kim Mundy.
That saw the euro spike higher and a broad decline in the U.S. dollar, which was further fuelled by speculation the Federal Reserve might have to ease again given the explosion of U.S. COVID-19 cases and deaths.
While there is one worrying outbreak in the Australian state of Victoria, the rest of the country has it well contained and New Zealand is almost free of the virus.
That has allowed much of the economy to re-open and shoppers to start buying again. Data out Wednesday showed Australian retail sales rose another 2.4% in June, on top of a record 16.9% jump in May.
Annual sales growth was a red-hot 8.2%, almost triple the pre-COVID pace, as consumers switched to goods from services.
Reserve Bank of Australia (RBA) Governor Phil Lowe on Tuesday said the economy had turned the corner and showed little inclination to ease policy again.
Lowe also noted that the Aussie’s recent gains were justified by rising prices for Australia’s major commodity exports, including iron ore, copper and gold which touched a nine-year top.
In the debt market, three-year bond futures dipped a tick to 99.685, and the 10-year contract 1.5 ticks to 99.1050.
Demand remained strong at government tenders with a single buyer taking all A$2 billion of a 2029 offer on Wednesday, even though there were A$6.3 billion of total bids. (Editing by Simon Cameron-Moore)
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