WELLINGTON/SYDNEY: The Australian and New Zealand dollars were nursing heavy losses against the US dollar and yen on Thursday, on deepening worries about Spain, putting the currencies on track to post the largest monthly losses in eight months.
The Aussie hovers near six-month lows at $0.9700, from $0.9714 in NY, having slipped 1.2 pct since previous session. It briefly touched a six-month low of $0.9673. Key support at $0.9664, with stops cited below $0.9650. A break would target $0.9388, the Oct 4 low.
Against safe-haven yen, it extends offshore losses at 76.44 yen. It dipped as low as 76.19, its weakest since late November.
The kiwi soggy at $0.7521, having slumped to $0.7501 in earlier trade, down around 1 pct Over the past day. The kiwi finds its footing for now as investors pick up the currency around the psychological $0.7500 level.
Asian bourses book hefty losses adding to an already heavy tone for high-risk currencies.
Risk aversion sends Australian government bonds to record highs with the three-year contract catapulted to 97.960, its highest since 1992. The 10-year contract leaps to 97.205, a fresh all-time peak.
The 10-year cash bond yield tumbles below 3 percent to a low of 2.86 pct, a level not seen since the early 1950s. Last at 2.90 percent.
Interbank futures, which are fully priced for a 25 bp-cut next week, narrow the odds of a deeper 50bp-easing and now imply a one-in-three chance, from one-in-five earlier in the week.
Markets find little comfort from a bag of mixed Australian data. Business investment jumped 6.1 pct in Q1 and bodes well for GDP data due next week. Estimates for future spending pointed to strong growth for the next year or more, thanks to the nation's red-hot mining sector.
But the data also included a large fall in Australian building approvals.
Worries of contagion from Spain's ailing banks, Greece's uncertain political situation and Italy's rising borrowing costs conspired to boost risk aversion in the latest stage of a crisis that has dogged financial markets for more than two years.
Aussie has fallen 7 pct this month, while the kiwi is down 8 pct, the biggest decline since Sept.
Kiwi creeping closer to a six-month low of $0.7458 a week ago with key support at $0.7531, the 61.8 pct retracement of its corrective rally from the past week. A clean break below $0.7500 would pave the way for a fall to the mid $0.7400 region.
No reaction to data showing that New Zealand business confidence remains firm, despite a souring outlook.
New Zealand government bond prices gain, pushing yields as much as 13 basis points lower. The benchmark 10 year bond tumbles to 3.485 percent, approaching a lifetime low around 3.475 percent hit last week.
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