WELLINGTON/SYDNEY: The Australian and New Zealand dollars slipped on Thursday with commodity prices under renewed pressure as hopes dimmed that a solution to Europe's debt crisis will be found at a key EU summit this weekend.
The Aussie dipped to $1.0182 from $1.0223 late in New York on Wednesday. It has been struggling above $1.0200 since rallying some 10 percent from a one-year trough of $0.9388 on Oct 4. Initial support is seen near $1.0140.
The New Zealand dollar slipped to $0.7894 from New York's $0.7914. Having failed to hold above $0.8000, it looked likely to test $0.7860.
Both currencies had been steady in early trade, until Shanghai copper fell by its 6-percent limit.
"It looks to be more of a commodities-led sell-down. Risk currencies would see a bit of weakness carry on into London," said ASB Bank head of institutional FX sales Tim Kelleher.
Hopes that Europe will come up with a comprehensive plan to tackle its debt problems faded after French President Nicolas Sarkozy on Wednesday said talks to boost the bailout fund have stalled.
Further casting a shadow on risk assets, a Fed survey showed the US economic outlook was weaker in September.
The Antipodeans also retreated against the yen, with the Aussie and kiwi both down about 0.5 percent at 78.12 yen and 60.52 yen respectively.
Against the kiwi, the Aussie softened to NZ$1.2892 from a session high of NZ$1.2921, staying below a three-month peak of NZ$1.2931 set on Tuesday.
The New Zealand government bond prices recovered early losses, with yields steady, after the sale of a hefty NZ$900 million worth of bonds saw solid demand.
Australian debt futures were mixed with the three-year contract 0.01 points higher at 96.170 and the 10-year down 0.01 points at 95.485, slightly underperforming the short-end as markets digested A$3.25 billion ($3.32 billion) of a new 15-year bond.
The April 2027 debt, the longest-dated bond in Australia, was priced at a yield to maturity of 4.88 percent.
"Under the circumstances, I would have thought the pricing was pretty good and there was relatively strong demand," said Damien McColough, strategist at Westpac.