WELLINGTON: The Australian and New Zealand dollars plumbed multi-month lows versus sterling on Friday, knocked by the UK currency's broad gains after early results from a Scottish independence vote showed support for Scotland staying in the union.
The Aussie slipped to a six-month low around A$1.8470 per pound, while the kiwi plumbed a 7 1/2-month trough around NZ$2.0336 as early polls showed higher-than-expected opposition for Scotland to separate from the United Kingdom.
"Sterling is well supported on the vote, and this is having an impact on the crosses," said Hamish Pepper, currency strategist at Barclays Capital in Singapore.
Losses against the pound knocked the Antipodean currencies from intraday highs hit against the US dollar in early local trade, when they were initially boosted by selling in the greenback versus sterling.
The Aussie fell 0.5 percent to $0.8937, retreating from an intraday high of $0.9005 and closing in on a six-month low of $0.8927 hit on Thursday, when a policy statement from the US Federal Reserve stoked expectations for faster US rate rises later next year.
It risked erasing gains made in offshore trade, when US data showed a slip in monthly housing starts and factory activity even as lower unemployment claims suggested an improving jobs market, a key focus of the Federal Reserve's rate outlook.
Initial technical support for the Aussie was seen at $0.8891, a low hit in March, followed by $0.8858, the 76.4 percent retracement of the currency's rally this year.
NZ VOTE AHEAD
Analysts cautioned that both currencies would remain on the back foot over the medium term as ongoing signs of an improving US economy fuel expectations that US interest rates may be higher in a year's time.
This would push the Aussie and the kiwi lower, as a rise in US rates from near-zero levels would erode the Antipodean currencies' rate advantage, while a crank-up in market volatility would also weigh on the higher-yielding currencies.
Implied options volatility in both currencies have remained high after rising in past weeks, and analysts say that a further climb could also prompt investors to sell the currencies which are considered to be higher risk.
Both the central banks of Australia and New Zealand are widely expected to hold their official interest rates steady through year end at 2.5 percent and 3.5 percent, respectively.
The Reserve Bank of New Zealand is expected to raise rates gradually from early 2015, while a pick-up in Australian economic growth may require the Reserve Bank of Australia to lift rates possibly around the same time.
The New Zealand dollar slipped 0.3 percent to a session low of $0.8117, inching towards a seven-month low of $0.8078 hit earlier in the week.
A fall below $0.8052 would mark its weakest level of the year.
Moves in the kiwi were also dominated by sterling, while investors looked to a general election in New Zealand on Saturday.
The ruling centre-right National party is widely tipped to win, although it will likely need the support of fringe parties to form a coalition government.
Traders said the kiwi may stage a slight rally early next week on a win by the business-friendly National, but they warned that the currency may suffer if the party is unable to quickly form a government, which would raise political uncertainty.
"If it's a hung parliament on Monday morning, then the currency will be under some pressure," said Tim Kelleher, head of institutional sales at ASB Bank in Auckland, adding that a test of year's low was possible in the near term.
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