SYDNEY/WELLINGTON (Reuters) - The Australian dollar bounced to a one-week high on Thursday helped by upbeat data on home building and trade, while its U.S. counterpart was knocked by reports President Donald Trump had decided on a new head of the country's central bank.
The Aussie blipped up 0.5 percent to $0.7716 <AUD=D4> and moved further away from recent lows at $0.7625. The New Zealand dollar <NZD=D4> also extended gains made in the wake of a strong jobs report to reach $0.6933.
Aiding the Aussie were figures showing approvals to build new homes proved surprisingly resilient in September while the country's trade surplus doubled to A$1.75 billion in a positive for economic growth.
Analysts at NAB estimated net exports could have added as much as half a percentage point to gross domestic product (GDP) in the third quarter.
"Our model of the economy calls for a 0.9 percent rise in GDP for Q3, taking annual growth up from 1.8 percent to 3.2 percent," they wrote in a note to clients.
Not helping the U.S. dollar were numerous reports Trump had chosen current Federal Reserve Governor Jerome Powell as the next chair in a nod to continuity.
Powell was seen as less hawkish than the other main contender, John Taylor, and investors responded by nudging the currency and U.S. Treasury yields lower.
There was also much uncertainty about a long-awaited package of U.S. tax cut proposals which were due to be announced later on Thursday.
After an embarrassing one-day postponement, Republican lawmakers will seek up to $6 trillion in tax cuts over 10 years but likely not spell out completely how to offset them.
The promise of tax cuts has generally been viewed as supportive of U.S. economic growth and the dollar, but getting the package passed will be a hard-fought affair.
For the kiwi dollar, sentiment was still benefiting from very strong jobs data released on Wednesday which should reassure the Reserve Bank of New Zealand ahead of its policy decision next week.
It also provided a distraction from political uncertainty as the country's new Labour-led government shakes up policies on migration and foreign investment.
"Our view remains that the NZD is oversold, building in an unnecessary political risk premium over recent weeks," BNZ said in a research note.
"We think it can recover further, with next Thursday's RBNZ policy statement a potential domestic source of NZD support."
New Zealand government bonds <0#NZTSY=> pulled up in line with U.S. Treasuries, to nudge yields down a basis point.
Australian government bond futures were better bid, with the three-year bond contract <YTTc1> up 3 ticks at 98.000. The 10-year contract <YTCc1> added 5 ticks to 97.3300.
(Editing by Shri Navaratnam)
