Australia, NZ dlrs on High as Yields, Commodities Hit Roof

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SYDNEY, Feb 25 Reuters The Australian and New Zealand dollars climbed to multiyear peaks on Thursday as a global rush into reflation plays swung commodity prices and bond yields sharply in their favour.

The Aussie was enjoying the rarefied air at 0.7960 , having reached heights not visited since early 2018 at 0.7979. It was up 1.2 on the week as momentum funds piled in on the break of major chart barriers, particularly against the yen and euro.

The next target is the psychological 80 cent level and a peak from Jan. 2018 at 0.8136.

The kiwi dollar climbed to 0.7430, clearing its 2018 top to reach levels not seen since August 2017. The next major target is the peak for all of 2017 at 0.7557, and a break there would take it to levels last visited in mid2015.

For Australia, the combination of buoyant commodity prices and decent export volumes means that resourcerelated export receipts have been healthy, said CBA head of Australian economics Gareth Aird.

Prices are expected to remain elevated and that will generate ongoing large trade surpluses which will support the Australian dollar.

Miners have paid out bumper taxes and dividends in Australia, so turning U.S. dollars earned into Aussie dollars.

The reflation trade has combined with upbeat economic data at home to fuel a major rise in bond yields well beyond that seen in the U.S.

Australian 10year yields shot up to 1.705, the highest since May last year and a jump of 29 basis points this week alone. The spread…

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