SYDNEY/WELLINGTON: The Australian and New Zealand dollars looked set to end the week on a sour note after a report that a doctor in New York had tested positive for Ebola weighed on risk appetite.
Both Antipodean currencies, usually sold off in times of heightened risk aversion, fell against the yen, greenback and the euro.
The Aussie slipped 0.3 percent to $0.8738 while its New Zealand counterpart dipped 0.1 percent to $0.7812. Against the yen, the Aussie unwound almost all of Thursday's rally to be at 94.31 yen. The kiwi shed 0.2 percent to 84.45 yen.
Pressure emerged after the New York Times reported that a physician with Doctors Without Borders, who returned to New York City from West Africa, has tested positive for Ebola, making him the city's first diagnosed case.
Adding to the cautious mood, average new home prices in China's 70 major cities fell 1.3 percent in September from a year earlier, marking the first annual drop in nearly two years, Reuters calculations from official data showed.
China is a major export market for both Australia and New Zealand.
On the week, the kiwi is on track to end more than 1 percent lower against the greenback, further hampered by negative local factors including Thursday's soft third-quarter inflation data.
The Reserve Bank of New Zealand (RBNZ) holds its next cash rate review on Thursday and is likely to sound dovish.
"They are likely to lengthen the rates pause period and they will put more conditionality around the prospect that rates are eventually going up," said Westpac senior strategist Imre Speizer.
The slowing of New Zealand's inflation rate to the bottom of the RBNZ's 1-3 percent target range has seen analysts push out the likely starting date for a resumption in tightening to the middle of next year.
The RBNZ raised its cash rate by 100 basis points to 3.5 percent between March and July, but last month retreated to the sidelines to assess the impact of those rate hikes, the state of the economy, commodity prices, and exchange rate.
Speizer said he expected further selling of the NZ dollar next week towards a 14-month low of $0.7709 seen late last month. Against the neighbouring Aussie, the kiwi fell to a two-week low of NZ$1.1230 per AUD, before clawing back some lost ground to NZ$1.1166.
In contrast, the Aussie has enjoyed a far more uneventful time as it drifted in a slim range for a third week. It was down a mere 0.2 percent on the greenback so far this week.
Since its hefty fall from $0.9403 in early September to $0.8642 on Oct. 3, the Aussie has been in consolidation mode.
"It is difficult to see traders having any real conviction given the current tight range," said Stephen Innes, senior trader at OANDA Asia Pacific.
"I suspect local traders will look for breakouts but failing that, patience may be the word at the moment."
New Zealand government bonds were trading with an offered tone, with long-dated yields as much as 5 basis points higher.
Australian government bond futures were flat, with the three-year bond contract at 97.440 and the 10-year contract at 96.720.
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