SYDNEY/WELLINGTON: The Australian dollar slipped on Monday following a batch of disappointing data at home and in China, putting the currency on the backfoot a day before an interest rate review by the Reserve Bank of Australia.
The Aussie was down 0.2 percent on the day at$0.9259, pulling away from a 1-1/2 week high of $0.9322 after building permits fell for a second month in March. Markets had been hoping for a bounce following a hefty fall in the previous month.
Not helping the Aussie, a survey showed activity in China's manufacturing sector continued to cool in April, adding to questions about whether the Chinese economy has stabilised or not.
Traders, however, expect no big moves in the Aussie ahead of the RBA's interest rate decision on Tuesday, and other major data due later in the week.
"With the RBA tomorrow and employment released on Thursday, we only expect minimal range-trading right now around $0.9250-0.9300 as investors appear reluctant to place fresh bets," said Annette Beacher, head of Asia-Pacific research at TDSecurities in Singapore.
The RBA is considered almost certain to keep its cash rate at a record low 2.5 percent at its May 6 meeting and reiterate that there would be a "period of stability in interest rates."
The Aussie also lost ground against the yen, shedding 0.4 percent to 94.33, while the euro climbed 0.3 percent to A$1.4979.
Against the kiwi, it slipped to NZ$1.0689, keeping a one-month trough of NZ$1.0649 in sight.
Unsettled by the Aussie's slide, the New Zealand dollar fell 0.2 percent against the dollar to $0.8655, retreating from a near three-week high of $0.8682. But analysts remained upbeat about the kiwi, saying the market's current outlook for relatively neutral global growth and risk in the coming months was favourable for the currency.
"Global growth is ticking along, but it's not going fast enough to be really attractive compared with the growth and the carry available in the New Zealand economy," ANZ currency strategist Sam Tuck said.
"The longer this 'not-too-hot, not-too-cold' growth goes on, the more chance you have of testing the kiwi's upside."
Offers above $0.8700 were likely to cap gains for now. A break there would clear the way for a run up towards $0.8746, a 2-1/2-year high hit in April.
Support was seen in the $0.8640/50 region.
New Zealand government bonds inched up, pushing yields a basis point lower.
Australian government bond futures tracked the rally in US Treasuries, with the 10-year contract outperforming the three-year contract resulting in a flatter yield curve.
The three-year contract rose 3 ticks to 97.110, while the 10-year gained 5 ticks to 96.150.
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