WELLINGTON/SYDNEY: The Australian and New Zealand dollar slipped on Wednesday, with investors using growth concerns in China and a large unwinding of short positions in the euro as an excuse to take profits.
Aussie edges lower to $1.0468, from $1.0490 in early trade. Next support seen around $1.0464, the 20-day MA, ahead of $1.0432, the low on Aug 2. Resistance at $1.0580.
New Zealand dollar drifts to a near three-week low around $0.8040, more than half a cent lower from its late local level on Tuesday.
Global themes and events driving the kiwi, and the momentum is negative, with near-term support seen at $0.8028 with a substantial base seen at $0.7990, the late-July low.
Investors looking for excuses to sell following hefty gains for the Antipodeans. Aussie had climbed to a five-month peak of $1.0615 last week, while the kiwi rose to $0.8224 earlier this month, its highest since late April.
Some cited a media report suggesting investors pulling money out of China on continuing concerns over the health of its economy following a run of disappointing data.
"We focus on anything slightly bearish," sums up a trader.
A pullback in Australian consumer confidence did little to lift the mood for risk assets. The consumer sentiment index dropped 2.5 pct as people fretted about their finances and the economic outlook despite a run of upbeat data, lower interest rates and government handouts.
Australia wage price index data rose 1 pct in Q2, slightly above forecasts of 0.8 pct.
Aussie dollar had already been under pressure in what had largely been a technical move led by a squeeze in crowded short euro/Aussie positions.
Euro gains momentum at A$1.1766, bouncing back from an all-time low of A$1.1597 hit twice early this month. A break of key resistance of A$1.1770 would target A$1.2135/45, the 38.2 pct of the May-August retracement and the 55-day MA.
Likewise, euro well supported against the kiwi at around NZ$1.5316, close to a three-week high, from a record trough of NZ$1.4955 of Aug. 3.
Latest auction results from dairy giant Fonterra due in NZ on Thursday, along with manufacturing figures and job ads. Q2 producer prices are out on Friday.
NZ government bonds softer, sending yields 2 bps higher along the curve.
Australian bond futures fall with the three-year contract off 0.020 points to 97.250, while the 10-year contract eases 0.025 points to 96.760.
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