Australian dollar climbs on US shutdown hopes, hits 12-year high on kiwi

SYDNEY, Nov 10 (Reuters) - The Australian dollar climbed on Monday amid hopes that the U.S. government shutdown may end, while still hawkish commentary from a top central banker helped it extend a bullish run against the kiwi to new 12-year highs.

The Aussie is often traded as a proxy for global risk due to its economy's reliance on commodity exports. It is up along with stock markets in Asia after the U.S. Senate moved toward a vote on reopening the federal government and ending a record 40-day shutdown.

The Aussie AUD=D3 rose 0.4% to $0.6521, having ended last week 0.8% lower to break a three-week winning streak. It is now back above the key 65 cent level, but resistance is heavy at 66 cents.

"It does look as though the Aussie is taking heart from the apparent end to the U.S. political stalemate that is boosting U.S. equity futures in anticipation of a rebound in the U.S. economy," said Sean Callow, a senior analyst at ITC markets.

"RBA's Hauser may have also helped the Aussie at the margin, with his comments reinforcing the hawkish lean of the November meeting."

In a speech in Sydney, Reserve Bank of Australia Deputy Governor Andrew Hauser noted the starting point for Australia's economic recovery last year was the tightest in over 40 years, suggesting little urgency to ease policy soon.

He later said financial conditions are closer to neutral rates now.

"This was a further hawkish evolution of the RBA’s characterisation at the November (Statement of Monetary Policy)," said Taylor Nugent, a senior economist at the National Australia Bank.

"NAB expects the RBA to be firmly on hold before a final cut in May 2026, but risks are skewed to a 3.6% terminal cash rate for the cycle."

Three-year bond futures YTTc1 fell 4 ticks to 96.305 as markets pared back the total amount of easing expected by mid next year to 18 basis points, from about 20 bps before.

That helped the Aussie hit another 12-year high on the kiwi at NZ$1.1577 AUDNZD=, with the recent consecutive breaks higher suggesting a new trading range may have formed on a technical level.

Against the dollar, the kiwi NZD=D3 edged up 0.1% to $0.5632, having tumbled 1.7% last week to as far as $0.5606, a seven-month low.

The Reserve Bank of New Zealand is widely expected to cut interest rates by 25 basis points to 2.25%, with a 10% chance that it may surprise with a half-point move. Rates are seen bottoming near 2% by mid next year. 0#NZDIRPR.