The Australian and New Zealand dollars slipped on Monday as high yields in the United States and low rates at home combined with concerns about global growth to keep risk sentiment fragile.
The Aussie dollar was down 0.2 percent at $0.7565, after bouncing modestly from $0.7532 on Friday. It lost 1 percent last week and was threatening major chart support at $0.7501, a trough from last December. A break above $0.7650 would be needed to turn around the recent bearish trend.
The kiwi dollar was also struggling at $0.7070, having hit a four-month low of $0.7040 on Friday. Support lies around $0.7000 and $0.6955, with resistance at $0.7100.
Both currencies have lost ground to a firmer US dollar in recent weeks as US economic data tended to top expectations while domestic and European figures have been lagging.
Yields on Australian 10-year paper are already 17 basis points under the United States, levels not seen since 1998.
Bond futures firmed further on Monday with the three-year bond contract up 4.5 ticks at 97.780. The 10-year contract rose 4 ticks to 97.2000.
New Zealand government bonds also rallied, with yields down as much as 6 basis points at the long end of the curve.
A survey out of New Zealand on Monday showed business confidence declined in April and sentiment in the construction sector slumped as it struggled to keep pace with demand amid soaring costs.
Surveys out of China were better but not strong enough to break the cautious mood. The official gauge of manufacturing (PMI) dipped a tick to 51.4 in April, but still beat forecasts, while services edged up to 54.8, from 54.6.
There is much speculation the Reserve Bank of Australia (RBA) could trim its forecast for economic growth this week, even as it nudges up the outlook for inflation.
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