SYDNEY/WELLINGTON: The Australian and New Zealand dollars were heading for a second week of losses on Friday, weighed by a drop in oil prices, while bonds were in demand as a muted outlook for inflation globally pushed yields to 18-month lows.
The Australian dollar slipped to $0.8507, from $0.8552 in early trade, pulling closer to a four-year trough of $0.8480 touched Wednesday. It has shed one cent and a half this week, putting it on track to end the month more than 3 percent lower.
Not helping the Aussie was weaker local equities with the energy sector hard hit.
The Aussie was nursing hefty losses against the euro and pound which both gained more than 2 percent this week.
The New Zealand dollar was subdued at $0.7842, from an overnight high of $0.7927, and on track for a 0.4 percent weekly loss.
For the month, though, the kiwi was up 0.7 percent, though ANZ Bank analysts cautioned month-end positioning may produce "some odd moves in an illiquid market".
Support was seen at $0.7820, ahead of $0.7800, with offers seen emerging on any break through $0.7900. The kiwi held much of its recent gains against the Aussie dollar, which eased to NZ$1.0837, just above a four-month low touched on Wednesday. Australian government bond futures rose, with the three-year bond contract up 2 ticks at 97.570, having matched a two-year peak of 97.600.
The 10-year contract added 4 ticks to 96.910 in a bullish flattening of the curve. Yields on cash bonds dived to their lowest in more than a year with the 10-year bond at 3.08 percent, having touched 3.05 percent, the lowest since early May last year.
New Zealand government bonds were also in demand, with 10-year yields at around 3.93 percent, the weakest since mid-2013.
Comments
Comments are closed for this article.