SYDNEY, June 11 Reuters The Australian and New Zealand dollars were sidelined on Friday as bonds enjoyed their best week in over a year after investors dismissed a high reading on U.S. inflation as fleeting and no threat to supereasy monetary policy.
The Aussie was dozing at 0.7747, having spent the entire week in a tight range of 0.77190.7765.
The New Zealand dollar was marginally softer at 0.7187.
For the week, both the currencies were little changed.
The lacklustre trading comes as prices of iron ore , Australias top export earner, are volatile while milk prices, New Zealands No.1 export, are on track for a record high. It also comes amid expectations New Zealands central bank could raise rates earlier than previously expected and as Australias central bank signalled a policy shakeup in July.
On a 100day basis, all major drivers of the cross have failed to spark a move, ANZ analysts wrote in a note.
This is not because AUDNZD is moving contrary to fundamentals. It is simply that it has stopped moving. Historic volatility, on almost all tenors, is closing in on a multidecade low. But that cant last forever.
During the year so far, the Aussie is barely changed against its kiwi counterpart.
Investor activity has shifted to bonds instead, with yields on Australian 10year government papers down 22 basis points this week, the biggest fall since March 2020. Futures were buoyant too, with the 10year contract jumping 19 ticks to 98.5860.
New Zealand government bonds…