Australia, NZ dlrs stay near 2-1/2 year lows as trade war intensifies
By Swati Pandey
SYDNEY, Sept 12 (Reuters) - The Australian and New Zealand
dollars eased on Wednesday to hold near 2-1/2 year lows as
investors preferred safer bets amid a deepening rift over trade
tariffs between the United States and China.
The Australian dollar slipped 0.3 percent to
$0.7099. On Tuesday, it touched $0.7085, a level not seen since
February 2016. The Aussie has slid more than 9 percent this
year, reversing all of its 2017 gains.
The New Zealand dollar was last at $0.6510 after
Tuesday's slip to $0.6501, also its lowest since February 2016.
The kiwi, after a 2.3 percent gain last year, has lost 8.2
percent of its value so far in 2018.
The antipodean currencies have taken a knock from the verbal
sparring between Washington and Beijing as trade tensions
between the world's two biggest economies escalate.
China told the World Trade Organization (WTO) on Tuesday it
wanted to impose $7 billion a year in sanctions on the United
States in retaliation for Washington's non-compliance with a
ruling in a dispute over U.S. dumping duties.
Separately, President Donald Trump told reporters on Tuesday
that the United States was taking a tough stance with China.
The Aussie was further weighed down by domestic data that
showed the weakest consumer sentiment reading since November, as
political squabbling in Canberra and hikes in mortgage rates by
most of the big banks soured the public mood.
The Melbourne Institute and Westpac Bank index of
consumer sentiment fell 3.0 percent in September from August,
when it dropped 2.3 percent.
"If sustained this will be a drag on consumer spending and
supports the case that households won't be comfortable
continuing to run down their saving rate," AMP chief economist
Shane Oliver said in a note.
"The soft readings on consumer and business confidence are
consistent with our view that the RBA will be on hold for a long
time yet and that it's premature to rule out the next move in
rates as being down."
The Reserve Bank of Australia (RBA) has kept rates at an
all-time low 1.50 percent, and most analysts expect this record
period of stable policy to extend for at least another year.
New Zealand government bonds eased, sending
yields about 2 basis points higher at the long-end of the curve.
Australian government bond futures were barely changed, with
the three-year bond contract flat at 97.975 and the
10-year contract off half a tick at 97.4125.
(Editing by Richard Borsuk)
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