Australian, NZ Dollars Firm On Trade Optimism

The Australian and New Zealand dollars drifted higher against their major rivals in the Asian session on Monday, as investors cheered signs of progress in trade talks between the U.S. and China after telephonic conversation of their leaders over the weekend.

U.S. President Donald Trump held telephonic conversation with Chinese president Xi Jinping on Saturday and claimed "big progress" towards a deal.

"Deal is moving along very well. If made, it will be very comprehensive, covering all subjects, areas and points of dispute. Big progress being made!," Trump tweeted.

Chinese news agency Xinhua cited President Xi Jinping as saying that both the nations aimed to achieve "stable progress" in ties.

Oil extended gains in the final trading day of the year, underpinned by progress in U.S.-China trade talks.

Investors also digested news that China's manufacturing activity contracted in December. The latest survey from the National Bureau of Statistics said that the manufacturing sector in China fell into contraction in December, with a PMI score of 49.4. That's down from the no-change mark of 50.0 in November, falling beneath that mark and into contraction. A score above 50 signals expansion.

Data from the Reserve Bank of Australia showed that Australia private sector credit rose 0.3 percent on month in November - in line with expectations and slowing from 0.4 percent in October.

On a yearly basis, private sector credit advanced 4.4 percent - again matching forecasts and slowing from 4.6 percent in the previous month.

The aussie rose to 1.0523 against the kiwi and 0.7067 against the greenback, from its early lows of 1.0483 and 0.7034, respectively. On the upside, 1.08 and 0.725 are likely seen as the next resistance levels for the aussie against the kiwi and the greenback, respectively.

The aussie advanced to 78.06 against the yen and 0.9626 against the loonie, reversing from its early lows of 77.60 and 0.9590,respectively. The aussie is poised to find resistance around 80.00 against the yen and 0.97 against the loonie.

The aussie strengthened to a 4-day high of 1.6180 against the euro, off its previous low of 1.6251. The next possible resistance for the aussie is seen around the 1.60 area.

The kiwi spiked up to 4-day highs of 0.6721 against the greenback and 1.7018 against the euro, off its previous lows of 0.6703 and 1.7067, respectively. The kiwi is seen finding resistance around 0.685 against the greenback and 1.68 against the euro.

Having dropped to 73.97 against the yen at 7:00 pm ET, the kiwi reversed direction and appreciated to 74.22. Next key resistance for the kiwi is possibly seen around the 76.00 level.