SYDNEY: The Australian and New Zealand dollars wallowed near multi-month lows on Monday as a rout in Asian stocks added to jitters in a market already fretting about Europe's debt crisis and slower global growth.
The Aussie dipped 0.4 percent on the day to $0.9654, edging closer to eight-month lows of $0.9581 hit on Friday.
It fell as deep as $0.9627 after small stops below $0.9645 were triggered with moving-average studies suggesting more downwards pressure ahead.
For now, immediate support can be found at $0.9625, ahead of $0.9581, the Dec 2010 low. A break below would target $0.9388, its 2011 trough plumbed in October.
Also under pressure, the New Zealand dollar eased to $0.7521, from $0.7535 in NY on Friday, having plumbed a fresh six-month trough of $0.7456.
Initial support is seen at $0.7500, ahead of $0.7455 with the topside capped at $0.7580.
A slump in Asian bourses, with Tokyo tumbling more than 2 percent, weighed heavily on the Antipodean currencies.
Traders said investors were also cautious ahead of the Reserve Bank of Australia rate decision on Tuesday.
Economists have ramped up expectations for another interest rate cut of 25 basis points or more, following last month's surprise half-percentage point easing.
"It is truly the deterioration in the global environment in the past few weeks that has put downward pressure (on rates)," said John Horner, a strategist at Deutsche Bank, one of three economists predicting another deep cut of 50 bps to 3.25 percent.
On Friday, a slim majority of economists polled by Reuters had expected rates to be on hold.
Global confidence took a hit following a weak US jobs reading on Friday, adding to fears of a euro zone breakup and a sharper-than-expected slowdown in China.
"We expect them to ease by 50 basis points to try to get a reasonable lift to confidence, whereas a 25 basis points move would be overwhelmed from the negative headlines out there at the moment," Horner added.
Swap markets have also narrowed the odds of a more aggressive rate cut, signalling a two-in-three chance of a 50 bps easing, from a one-in-five chance seen last week.
Still, some investors are wary of an Aussie bounce should the RBA keep rates on hold.
Key resistance is seen at $0.9775/80, the 10-day moving-average and the 61.8 percent Fibonacci retracement of the $0.9898/$0.9581 move.
Jittery markets and the prospect of more easing catapulted already red-hot Australian government debt to new all-time highs.
Three-year bond futures contract flew to 98.100, while the 10-year contract exploded to 97.360.
Ten-year government cash bond yields tumbled to historical lows of 2.71 percent from 4.45 percent in March.
Earlier on Monday, a raft of Australian data was disappointing, suggesting the RBA has plenty of room to ease if it chooses to.
Job advertisements fell for a second month in May, while company profits slipped again in the three months to March.
The Antipodean currencies even lost ground against a soggy euro , while they hovered near multi-month lows against the safe-haven yen.
The Aussie last traded at 75.45 yen, just above an eight-month low of 74.45 on Friday, while the kiwi sat at 58.80 yen, having touched 57.89, its weakest since Nov.
NZ markets were closed on Monday for the Queen's birthday.
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