The Australian and New Zealand dollars were looking to end the week on a firm note on Friday as more upbeat economic news from the United States and China offset concerns about the surge of coronavirus cases in some countries.
Following a surprisingly large bounce in U.S payrolls, a Chinese survey showed its services sector expanded at the fastest pace in over a decade in June amid an easing in lockdown measures.
That helped the Aussie hold at $0.6924 <AUD=D3> to be 0.9% higher for the week so far. Resistance lurks around $0.6974 and $0.7069, with support at $0.6900 and $0.6833.
The kiwi dollar stood at $0.6510 <NZD=D3> having gained 1.4% for the week so far. It faces resistance at $0.6537 and $0.6585, with support around $0.6502 and $0.6440.
Domestic news was also positive with Australian retail sales jumping a record 16.9% in May, recovering much of April's historic 17.7% dive which came as whole sectors were shut to fight the coronavirus.
Sales were also up on February before the lockdowns hit, and a sizable 5.8% higher on May last year.
Separate figures showed a sharp rebound in car sales for June, from very depressed levels in April and May, suggesting consumers were confident enough to make big ticket purchases.
"Really big purchases like car purchases have been off the agenda because they may have involved taking on debt," noted Craig James, chief economist at CommSec.
"So when the car market starts lifting it usually signals that the broader economy is well and truly on the recovery trail."
The data should comfort the Reserve Bank of Australia (RBA) ahead of its monthly policy meeting on July 7 when analysts assume rates will stay at 0.25% amid signs the economic downturn will not be as dire as first feared.
It is also expected to reiterate that rates will remain low for some years to come and that it will buy as much bonds as needed to keep three-year yields near 0.25%.
So far it has not had to buy much at all, having skipped purchases for two months straight. Three-year yields <AU3YT=RR> were steady at 0.269% on Friday having not been above 0.30% since late March.
Yields have remained low even as the government has vastly increased its borrowing to pay for crisis stimulus. On Friday it outlined plans to sell A$4-5 billion of new bonds every week, along with a new 30-year bond line.
(Editing by Ana Nicolaci da Costa)
