SYDNEY/WELLINGTON: The Australian and New Zealand dollars found a brief respite from selling on Friday with speculators seemingly satiated for the moment, but both currencies were still heading for their worst week in months.
The prospect of a slowdown in US monetary stimulus, lower commodity prices and funding pressures in China amid slowing growth have all combined to darken the outlook.
Aussie holding at $0.9237 for now, having been as low as $0.9163 on Thursday, its weakest since September 2010. Technically the downtrend remains intact for a push to $0.9145 and ultimately a test of 90 cents.
New Zealand dollar likewise steadies at $0.7797 supported by profit-taking on short positions, having fallen as much as 2 percent overnight to a one-year low of $0.7710.
The Aussie has shed around 3.5 pct so far this week against a broadly stronger US currency, its worst showing since late 2011. The kiwi is down about 3 pct for the week.
Antipodeans have taken a beating as markets price in an eventual end to super-easy money from the Fed, cranking up risk aversion and triggering an exodus from emerging markets and other higher-risk assets as investors unwind carry trades.
Asian share markets were under pressure again on Friday though off their early lows, thanks in part to hopes that a liquidity squeeze in China's banking system was starting to ease.
The Aussie has been sold as a proxy for less liquid emerging market currencies in Asia which are all under heavy pressure as investors unwind crowded trades in higher-yielding assets.
Bids suspected at $0.9150 stave off a further fall in the Aussie, while long-term technical support seen at $0.9143, the 38.2 percent retracement of its 2008-2011 rally.
Kiwi's break below $0.7761 adds to bearish technical signs for the currency, raises the possibility of a test of $0.7456, the 2012 trough.
Australian government bond futures follow Treasuries lower in what has been a painful week. The three-year contract was off 0.080 points at 97.190, while the 10-year contract shed 0.095 points to 96.255, just off a 13-month trough.
New Zealand government bond yields were up 3 to 4 basis points across the curve.
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