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
The Australian dollar 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
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
Worryingly, 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.
Many 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.
In 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
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 were little changed.
Australian government bond futures edged lower, with the
three-year bond contract and the 10-year contract
off half a tick each at 98.230 and 97.72.
(Reporting by Swati Pandey
Editing by Shri Navaratnam)
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