SYDNEY: The Australian and New Zealand dollars slumped to nine-month lows on Monday as dire credit data and more property woes from China heightened concerns about the health of their biggest export market.
The Aussie fell 0.5% to $0.6461, bouncing a little from a nine-month trough of $0.6456 hit earlier in the session. It is finding support at $0.6459, a 2023 low from May, following a 1.1% slide last week.
The kiwi dropped 0.4% to $0.5959, the lowest since Nov. 10, and breached a key support level of $0.5986, which is turning into a major resistance.
It has support at a chart level of $0.5906, after a 1.9% tumble the previous week.
The two antipodean currencies were pressured by more woes in China’s property market, a pillar industry that relies heavily on steel-making material iron ore from Australia.
Country Garden, the country’s largest private property developer, on Monday saw its shares plunging to a record low and its bonds being sold off. Dire credit data published late on Friday also suggest domestic demand remained incredibly weak even after policymakers cut interest rates.
Australia, NZ dollars face fourth weekly loss, threaten major support
The offshore yuan eased 0.2% to 7.2763 per dollar, the softest in two and a half months, and threatened a major support level of 7.2856.
A break there would take it to levels not seen since November last year.
“I think the Aussie dollar downtrend can continue. I think commodity prices can keep tracking lower because of the very soft Chinese economic recovery, and the Aussie may well reach our forecast earlier than what we expect,” said Carol Kong, a currency strategist at Commonwealth Bank of Australia.
CBA forecast that the currency would trend down further to 64 cents by the end of the year. Looking ahead, Australian wages and labour force data are the domestic key events this week.
Economists expect wage growth likely picked up slightly to 0.9% last quarter from 0.8% previously, while the economy is likely to have added 15,000 jobs, after two consecutive months of upside surprises. Local bonds extended a global sell-off from Friday.
Australian three-year yields climbed 7 basis points to 3.901%, the highest in two weeks, while ten-year yields were also up 7 bps to an one-month top of 4.195%.
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