The Australian and New Zealand dollars hunkered near multi-month lows on Thursday as concerns about sliding asset prices in China clouded the outlook for both global growth and home-grown exports. Speculators have been selling the currencies as a liquid proxy for the Chinese yuan which has skidded to six-month lows amid mounting Sino-US trade tensions.
The Aussie dollar was huddled at $0.7340, having shed almost 0.7 percent overnight to $0.7323. It briefly broke the $0.7329 low from May last year and risked a retracement all the way to a $0.7160 nadir from December 2016. There were plenty of bearish milestones for the kiwi too. It was down at $0.6784, after sliding 0.8 percent on Wednesday to its lowest since June 2016 at $0.6778.
Dealers reported some support around $0.6680 but a bearish chart backdrop meant the next likely target was a $0.6676 trough from May 2016. The kiwi has been undermined in part by New Zealand's widening interest rate gap with the US Federal Reserve, which still aims to hike rates another two times this year.