WELLINGTON/SYDNEY: The Australian and New Zealand dollars nursed sharp losses on Friday and were on track to end the week down more than 1 percent against a host of currencies as worries over global growth further sapped investor appetites.
The Aussie dollar was pinned at $1.0314, having slipped to a five-week low of $1.0269 on Thursday. So far this week, it has lost 1.8 percent, its largest weekly decline in six months. This was in sharp contrast to last week when it climbed to $1.0585, the highest since January.
Growth-linked currencies were hard-hit by a broad sell-off in risk assets that started on Monday.
Joseph Capurso, a strategist at Commonwealth Bank of Australia, said the Aussie could slip another 50 pips before creeping back up again.
"Australia has CPI numbers next week and with tentative signs of the housing market starting to strengthen, the inflation reading could be higher and encourage markets to take out some of the rate cuts," he said.
Investors have recently narrowed the odds of further easing by the Reserve Bank of Australia, giving around one-in-three chance of a rate cut in May to a record low of 2.75 percent. The market is now pricing in 40 basis points of rate cuts over the next 12 months, up from 20 points last week.
Australia's first-quarter inflation numbers are due on Wednesday with forecasts for underlying inflation to come in at 2.4 percent, well within the RBA's target band of 2 to 3 percent.
Initial support for the Aussie was found at Thursday's low of $1.0284, the base of the Ichimoku cloud. A break above Thursday's peaks of $1.0338 would be bullish, ending five days of lower highs.
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