SYDNEY/WELLINGTON: The Australian and New Zealand dollars hovered near one-month lows on Tuesday, weighed by month-end flows and a bounce in the euro, while a holiday in Japan dampened trade.
The Aussie slipped to $0.9242, from $0.9258 earlier, pulling further away from a peak of $0.9461 touched earlier in April. It fell as far as $0.9227, its lowest in nearly a month with immediate support found at $0.9205.
The Aussie was pressured against the euro, yen and Canadian dollar.
The single currency rose to A$1.5000, its highest since late March, with a break of resistance around A$1.4960 a bullish technical signal.
"There is a bit of focus on cross-selling as the Aussie topped out," said a trader at a European bank in Singapore.
The euro was on track to show a gain of 1 percent in April with much of its strength following fading expectations for additional stimulus from the European Central Bank. The Aussie remained near one-month lows against the yen at 94.68 and touched a five-week trough versus sterling.
The Singapore-based trader forecast the Aussie to remain pressured with a raft of key data due out of China, Europe and the United States. He sees scope for the Aussie to skid to $0.9150 by the end of the week.
The New Zealand dollar was down at $0.8525, having retreated to a near-four week low of $0.8520 from Monday's $0.8588 high.
"With the Kiwi having fallen off its perch somewhat from yesterday, New Zealand dollar bulls will grow nervous as we look to test $0.8500 on the day," said ASB economist Daniel Smith.
Near-term support was seen at $0.8500/10, with offers at $0.8570. Domestic data showed the biggest monthly trade surplus in nearly three years in March on the back of record export earnings, especially to China.
However, with dairy prices having fallen around 20 percent over the past two months and March traditionally the peak month for exports, the trade picture is expected to soften in the months ahead.
The market was unfussed by an election policy proposal from the opposition centre-left Labour Party to expand the remit of the country's central bank beyond inflation targetting to include boosting savings and weakening the exchange rate.
The party is a distant second to the ruling National Party in the polls ahead of an election in September.
"We suspect that the enduring impact on interest rates and the exchange rate are likely to be much smaller than the Labour Party would hope for," said Deutsche Bank chief economist Darren Gibbs, adding that the proposal merited further investigation and modelling.
New Zealand government bonds were slightly firmer, sending yields a tick lower across the curve. Australian government bond futures pulled back from multi-month highs, with the three-year bond contract down a tick to 97.080.
The 10-year contract was off half a tick to 96.075, having touched a three-month peak Monday.
The premium offered by Australian 10-year yields over US Treasuries has shrunk to around 123 basis points, the lowest in more than 7 months.
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