The Aussie rose 0.3% to $0.6702, having eked out a 0.2% gain overnight to as far as $0.6696. After breaching the 14-day moving average of $0.6685, it now faces major resistance at the 200-day moving average of $0.6769.
The kiwi gained 0.4% to $0.6260, after also edging 0.2% higher to $0.6235. Resistance now lies at $0.6275, a high from early March.
Data on Wednesday showed China's retail sales in the first two months of the year swung back to growth, while fixed-asset investment grew at a much faster-than-expected clip, though industrial output was below forecasts, confirming an economic recovery, albeit uneven, after Beijing dropped almost all COVID-19 curbs in December.
Overnight, Wall Street rallied on bargain-hunting as fear of a banking crisis eased after the collapse of Silicon Valley Bank and Signature Bank, and as U.S. inflation data delivered no nasty surprises, reinforcing hopes the Federal Reserve will likely go for a smaller rate hike when it meets next week.
"The latest inflation figures for the U.S. show there is more work to be done by the Federal Reserve to rein in inflation," said analysts at ANZ in a note to clients. "The inflation figures when considered in isolation may have warranted a larger response from the Fed, but the recent market turmoil means 25bp is now its most likely response." Australian bond yields recovered after plunging the day before, with futures back to implying bets between a pause and a 25 basis point hike for the Reserve Bank of Australia at the policy meeting in April, rather than between a cut and a pause. The yield on three-year bonds held largely steady at 3.070%, having pulled back from the lowest level since late January at 2.93%, while ten-year yields hovered at 3.446% , away from a three-month low of 3.329% hit one day ago.
(Reporting by Stella Qiu; Editing by Kim Coghill)
