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The Australian and New Zealand dollars marked time on Wednesday with investors relieved the latest episode of the Brexit drama had come and gone without causing convulsions in global markets. Sentiment got a fillip when China's central bank made the largest ever net injection of cash into the financial system, a day after promising more support for the economy.

Some analysts believe Beijing could also deliver 2 trillion yuan ($296.21 billion) worth of cuts in taxes and fees as part of a stimulus package. The Aussie dollar was just a fraction lower at $0.7194, snuggled between support at $0.7180 and resistance in the $0.7226/35 area. The kiwi likewise was a shade easier at $0.6810, having trod a tight $0.6801/$0.6846 range overnight.

All the action had been in sterling, which slid as far as $1.7634 ahead of the parliamentary vote on Brexit, only to rebound all the way back to A$1.7859 after it. In New Zealand, data showed electronic retail card spending dropped a sharp 2.3 percent in December. The series covers about 68 percent of core retail sales in the country.

Some of the pullback was due to a fall in petrol prices, but other sectors also saw weakness, with the largest decline in spending on durables since late 2010. Bond markets were quiet, with Australian the three-year bond futures up 1 tick at 98.230. The 10-year contract rose 1 tick to 97.7200. Yields on New Zealand government bonds dipped around 1 basis point across the curve.

Lawmakers defeated Prime Minister Theresa May's EU divorce deal by a crushing margin of 230 votes, the worst drubbing in modern British history.

Copyright Reuters, 2019


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