© Reuters. Australia, NZ dlrs near one-week lows as risk appetite wanes
SYDNEY, Jan 17(Reuters) – The Australian and New Zealand dollars held near one-week lows on Thursday as renewed worries about global growth had investors flocking away from risk assets.
The Australian dollar AUD=D4 slipped to $0.7160, a level not seen since Jan. 9, and was last fetching $0.7166
Its New Zealand counterpart eased 0.2 percent to $0.6762, also the lowest since Jan.9.
The antipodean currencies started the year on a firmer footing after a battering in 2018, but heightened anxiety a protracted Sino-U.S. trade war could see a sharp slowdown, or even a recession, in the world’s biggest economies is clouding the outlook.
Economist John Kemp, a Reuters columnist, on Thursday predicted the global economy was headed for a recession this year, with the OECD’s composite leading indicator falling to just 99.3 points in November – its lowest reading since October 2012. data out from Singapore showed the city-state’s exports plunged the most in more than two years in December in a sign of increasing strain in global trade and demand. economists expect the Sino-U.S. tariff war to hurt other trade-heavy economies including Australia.
And, data showed pressure building on the local economy.
Data out on Wednesday showed a gauge of consumer confidence slid 4.7 percent in January, from February, to post its sharpest decline in over three years. New Zealand too, the local data was less encouraging with weak credit card spending for December.
“There are some suggestions that weakness might owe something to positioning in front of next week’s important fourth quarter CPI numbers (for New Zealand) and the risk of weak numbers,” Ray Attrill, head of forex strategy at National Australia Bank wrote in a note.
“AUD is also weaker, perhaps for the same reason – Q3 Australia CPI is out of January 30th.”
The Australian and New Zealand economies have been expanding at a decent pace but there are hardly any signs of inflation with wage growth remaining weak despite strong labour markets in both countries.
The two central banks are widely expected to keep rates at record lows for some time yet, with odds increasingly turning in favour of cuts in the face of downbeat global sentiment.
New Zealand government bonds 0#NZTSY= were little changed.
Australian government bond futures edged lower, with the three-year bond contract YTTc1 and the 10-year contract YTCc1 off half a tick each at 98.230 and 97.72.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.