The Australian and New Zealand dollars were heading for solid weekly gains on Friday as countries across the globe restarted their economies, although Sino-U.S. friction raised a potential pitfall later in the session.
President Donald Trump is due to give a news conference that might outline measures punishing China over its treatment of Hong Kong.
Anything that threatened to aggravate the two countries' trade dispute would likely be taken as negative for the Antipodean currencies.
For now the Aussie was holding at $0.6641 <AUD=D3> after backing away from an 11-week high of $0.6675. That left it 1.6% firmer for the week, but facing stiff resistance at the 200-day moving average of $0.6658 and a former top at $0.6685.
The kiwi dollar was a fraction softer at $0.6200 <NZD=D3> and off a 10-week peak of $0.6232, but still 1.7% stronger for the week so far. Its 200-day moving average lies at $0.6316.
The Aussie also had a good week on the yen with a rise of 1.4% to 71.28 <AUDJPY=>, having briefly touched its highest since late February at 71.92.
Jack Chambers, a rates strategist at ANZ, noted that for Japanese investors that hedged their currency exposure the premium offered by Australian 10-year bonds over domestic debt was the fattest in almost two years at 30 basis points.
"This may spur an increased interest in offshore demand, particularly with there being more being certainty about the stability of AUD funding conditions," he said.
Last week, the Australian government revealed it would spend A$60 billion ($39.8 billion) less on a job retention programme than first budgeted, likely cutting its borrowing needs for stimulus plans.
The Reserve Bank of Australia (RBA) this week also held out the hope that the economic downturn would not be as severe as first feared given success in curbing coronavirus.
Yields on 10-year bonds <AU10YT=RR> were down a couple of basis points for the week at 0.687% even though the RBA had again passed on the chance of buying any paper this week.
In contrast, the Reserve Bank of New Zealand was busily buying kiwi bonds, with NZ$1.35 billion picked up this week and another NZ$1.1 billion on the menu next week.
(Reporting by Wayne Cole; editing by Richard Pullin)
