ENM: Australian and New Zealand dollars struggle as investors back away from risk
SYDNEY/WELLINGTON: The Australian dollar fell to a one-month low on Thursday but trimmed losses as buyers emerged in a choppy session marked by renewed weakness in commodity prices amid concerns about the health of the global economy.
Falls in Asian stocks further underscored a cautious mood that saw investors turn to safe-haven government bonds for shelter. Australian yields fell as a result, with the 10-year sliding 8 basis points to 3.183 per cent, near a four-month trough of 3.180 per cent marked on Tuesday.
The Aussie dollar shed 0.4 per cent to $1.0269 at one stage, a low not seen since March 12, before staging a bounce to $1.0293, down 0.1 per cent on the day.
It was on track to end the week nearly 2 per cent lower, a dramatic turnaround from last week when it rallied to a three-month high near $1.0600.
Investors, who had been bullish on the Aussie dollar, were forced to reconsider their positions this week in light of disappointing economic growth data out of China, Australia's single biggest export market, and following a rout in commodity prices led by a historic drop in gold prices.
"The Aussie has really struggled to hold on to any gains this week. Aussie/yen is seeing a bit of selling as well and that doesn't help," said Michael Turner, strategist at RBC in Sydney.
The Aussie eased 0.4 per cent on the yen to 100.77 , having retreated from a five-year high of 105.43 set last week. It was also a touch softer on the euro, which rose 0.1 per cent to A$1.2670.
Growing risk aversion took a toll on the New Zealand dollar as well, knocking it well off a 20-month high of $0.8676 set a week ago.
The kiwi dollar was last at $0.8452, after earlier dipping to $0.8421. It also stumbled against the euro , which edged up 0.1 per cent on the day to NZ$1.5440.
On the yen, the kiwi was at 82.67, having clawed back from an intraday low around 82.25, but it was still well off a five-year high around 86.45 yen touched last week.
Demand around $0.8410 was seen bolstering the kiwi, while technical support lay at $0.8360-$0.8350, an area containing the 61.8 per cent retracement of its March-April rally.
A fall beyond that was unlikely so long as the Aussie stays above $1.0150, given that the kiwi has been moving in tandem with the Aussie versus the greenback.
