SYDNEY, Oct 9 (Reuters) - The Australian dollar is poised to
end the week in positive territory on Friday, strengthened by
bullish risk sentiment and higher commodity prices, while its
New Zealand counterpart lagged behind on aggressive monetary
The Aussie, which is often traded as a proxy for yuan, was
14 pips higher on Friday at $0.7181, with data showing
that the recovery in China's services sector activity extended
its fifth straight month in September.
The risk-sensitive Aussie is set for a further quarter of a
percent rise this week, extending the previous week's 1.92%
gain. A pick-up in crude and iron ore prices boosted the
The New Zealand dollar, meanwhile, weakened 0.5% to $0.6507
so far this week, following dovish statement from the
Reserve Bank of New Zealand (RBNZ) on Thursday that it was
"actively working" on negative interest rates.
The unit was up 0.4% at $0.6607 on Friday.
RBNZ officials "said that they'd rather be aggressive with
the delivery of monetary stimulus and be seen to do too much too
soon rather than too little too late," Commonwealth Bank
analysts wrote in a note.
They expect the RBNZ to cut the official cash rate by 75
basis points to -0.5% in April 2021.
The Reserve Bank of Australia (RBA), on the other hand, is
widely expected to further lower its cash rate to 0.1% from a
record low 0.25% at its November policy meeting but has
repeatedly said negative rates were "extraordinarily unlikely."
The dynamic helped pushed the Australian dollar up 0.83% for
its largest weekly gain against the kiwi since
On Friday, the RBA released its biannual Financial Stability
Review (FSR) in which it said the country's financial system was
strong to weather the economic shock though business failures
were likely to increase.
Australian government bond futures were steady, with the
three-year bond contract unchanged at 99.815. The
10-year contract was up two ticks at 99.15.
New Zealand government bonds rose slightly,
sending yields about 3 basis points lower across the long-end of
(Editing by Sherry Jacob-Phillips)