SYDNEY/WELLINGTON: The Australian and New Zealand dollars bounced off lows on Friday as commodity prices showed tentative signs of stabilisation, but the currencies were still on track to end the week lower.
The Australian dollar was on a firmer footing at $0.8641, from a low of $0.8566 touched Thursday.
It has slipped 1.2 percent this week, partly due to a rout in iron ore prices, Australia's top export earner.
While the steel-making ingredient looked to have steadied at $70 a tonne, from $75.1 on Monday, the Aussie is seen as vulnerable.
"It will struggle to find positive momentum because of the owntrend," said a trader at a European bank in Singapore, seeing the Aussie consolidating between $0.8550-$0.8850.
"USD strength and falling commodity prices will continue to weigh on the Aussie.
It will go below 85 cents before the end of the year," he added.
The Aussie was also on track for hefty weekly losses against the euro and pound, which each jumped more than 1 percent as investors unwound short positions.
But it managed to hold its own against a broadly weaker yen to be at 101.54, close to an 18-month peak of 102.40 touched this week.
The New Zealand dollar edged up to $0.7894, from $0.7876 but was still down 0.2 percent for the week.
Against the yen, the higher-yielding kiwi was at 92.75 yen, near a seven-year high around 93.20 yen hit earlier in the week. The kiwi has also gained versus the Aussie , which traded at NZ$1.0950, near a two-month low of NZ$1.0920.
The Aussie has fallen nearly 1 percent against the kiwi this week as slumping iron ore prices outweighed declining prices for New Zealand's major dairy exports.
Market participants expect the kiwi will remain supported around $0.7800 in the near term given its gains on the crosses, while offers above $0.7900 would cap any big bounces.
New Zealand government bonds were little changed.
Australian government bond futures were also subdued, with the three-year bond contract down 1 tick at 97.440.
The 10-year contract was unchanged at 96.705.
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