Australia, NZ dollars pop up on the yen as risk sentiment improves
By Swati Pandey
SYDNEY, March 9 (Reuters) - The Australian and New Zealand
dollars jumped against the yen on Friday as risk appetite got a
boost after North Korean leader Kim Jong Un offered to stop
nuclear and missile testing and to meet with his U.S.
Kim has committed to "denuclearization" and to suspending
nuclear or missile tests and extended an invitation to hold the
first-ever U.S.-North Korea summit, marking a potentially
dramatic breakthrough in the North Korea nuclear standoff.
The Australian dollar climbed 0.6 percent on the
safe harbour yen. For the week, the Aussie is now up 1.3
percent, snapping six consecutive weekly declines since Jan. 19.
The New Zealand dollar also added 0.6 percent
against the yen and was set for a 1.4 percent rise this week
following losses since early-February.
The antipodean countries are open economies exposed to
global growth and commodity prices, and their currencies tend to
rally when risk appetite improves.
"We think the move in the yen is reflecting a risk positive
sentiment following the news that President Trump will be
meeting Kim Jong Un. That is also being seen in the equities
market which have opened firm this morning," said Rodrigo
Catril, senior forex stratgist at National Australia Bank.
Catril said investors were still a bit cautious as they
awaited response from other countries on a U.S. plan to impose
duties on imported steel and aluminium.
The tariffs of 25 percent on steel and 10 percent on
aluminium will start in 15 days with initial exemptions for
Canada and Mexico and the possibility of alternatives for other
"We need to see if Trump expands this idea of imposing
tariffs on other goods," Catril said. "For now the market is
taking a bit of breather to the fact that some exemptions are
being made. But we remain cautious."
Against the dollar, the antipodeans were a tad weaker. The
Aussie eased 0.1 percent to $0.7779 but was still up a touch for
The kiwi slipped to $0.7253 for its third straight
session of losses. The currency is barely changed on the week.
Australian government bond futures were mixed, with the
three-year bond contract down 3 ticks to 97.865 and the
10-year contract flat at 97.2100.
(Editing by Sam Holmes)
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