The Australian and New Zealand dollars were on the ropes on Tuesday as worries about falling Chinese assets and rising global trade tensions slugged export-sensitive currencies. The Aussie dollar was pinned at $0.7345, having hit an 18-month trough around $0.7311 overnight. It has now shed over three cents in the past month and is approaching the $0.7160 nadir from December 2016. If that cracks, the currency will be at depths not seen since May 2016. The kiwi is already there, having touched its lowest since May 2016 at $0.6688. It was last trading at $0.6698, with $0.6576 the next major chart target.
New Zealand government bonds gained, sending yields 4 basis points lower at the long end of the curve. The general shift to safety helped Australian government bond futures rally to multi-month peaks. The three-year bond contract was near its highest since December at 97.955, while the 10-year contract added 1 tick to 97.4050.
Investors have been selling both currencies as a liquid proxy for Chinese assets which have been beset by fears an escalating trade conflict with the United States would stunt China's economic growth.
Comments
Comments are closed for this article.