The Aussie was up 0.3% at $0.6748 , having shed 0.4% to as far as $0.6707 overnight, not far away from its January low of $0.6689. It needs to clear the 200-day moving average at $0.6792 to keep the recovery going.
The Antipodean is up 0.3% for the week. The kiwi dollar was hovering at $0.6228 , after falling 0.6% overnight to as low as $0.6199, which was just a whisker above a three-month trough of $0.6134 hit on Tuesday. It is, however, up 1% for the week.
The two were helped by the return of risk appetite following comments by Atlanta Fed President Raphael Bostic, who said on Thursday that the impact of higher U.S. interest rates on the economy may only begin to "bite" in earnest this spring, an argument for the Fed to stick with "steady" quarter-point rate increases.
That came after unemployment claims data pointed to a still strong U.S. jobs market and other data showing a revised jump in labour costs at the end of last year, suggesting the Fed might have further to go in raising interest rates to tame inflation. Kristina Clifton, an economist at Commonwealth Bank of Australia, sees the Aussie dollar is still under-valued, estimating the fair value would be in a range of 74 cents to 86 cents.
"AUD/USD has risen in recent months thanks to an improvement in sentiment as the Chinese economy reopened but still remains well below our estimates of fair value. The undervaluation can support AUD/USD over time." The focus is now turning to China's annual parliament session on Sunday when Beijing will set its economic goals for the year and unveil fresh policy support to consolidate an economic recovery following the removal of stringent COVID-19 curbs. Bonds fell a little this week. The yield on three-year bonds rose 5 basis points to 3.631%, while 10-year bond yields was up 8 bps to 3.925%. (Reporting by Stella Qiu; Editing by Kim Coghill)
