The Australian and New Zealand dollars remained on a slippery slope on Monday as investors snubbed riskier assets on growing fears of a global slowdown, though hopes of more stimulus in China capped losses. The Australian dollar, a liquid proxy for the Chinese yuan, was last down 0.1% at $0.6728, not far from a recent decade low of $0.6677.
The Aussie finished last week 0.3% lower, clocking its six straight weekly decline. It skidded 1.6% in August on top of July's 2.5% fall. Its New Zealand counterpart was set for a sixth straight day of losses. It last held at $0.6307, within spitting distance of a recent 2016 low of $0.6283. The kiwi slid 3.9% in August.
Investors are worried the Sino-US trade dispute, which is showing no signs of cooling, would tip the world into recession. On Sunday, the latest US tariffs on Chinese goods kicked in while China has imposed duties on US crude. Investors took some solace from growing expectations of more stimulus in China, Australia's top trading partner, after the country's State Council signalled more support for its economy. An unexpected bounce in a private Chinese factory activity survey for August also helped sentiment.
Official data on the health of the Australian economy was mixed. Figures on home prices showed the best monthly gain in August since 2017, signalling a long-awaited upturn in the country's property market.
But separate data from the Australian Bureau of Statistics (ABS) showed a surprise drawdown in business inventories that suggested the economy might not have grown at all in the June quarter.
Second-quarter gross domestic product (GDP) data is due on Wednesday where the median forecast of 20 economists had been that the economy expanded 0.5% from the first quarter, while annual growth braked to just 1.4%.
Many economists said they could possibly downgrade their forecasts after Monday's data.
A survey of job advertisements fell in August, suggesting Australia's labour market was softening, cementing views the country's central bank may have to ease policy again after two rate cuts since June.