The Australian dollar plumbed a fresh 6-1/2-year low on Friday as renewed worries about global growth encouraged more selling by investors who were already deeply bearish, in turn dragging the New Zealand dollar lower. The Australian dollar fell as far as $0.6960, its lowest since 2009, after key support of $0.6980 finally gave way. It was last at $0.6975.
It has slipped 2.8 percent since Monday and if sustained, it would be the second largest weekly loss this year. The Aussie was hit on all fronts, even losing ground against a depressed euro. The common currency took a broad hit overnight after the European Central Bank suggested it may have to expand its already massive stimulus program.
The Australian currency also dropped to a two-year trough of C$0.9219 versus its Canadian peer, while it was down 4.5 percent against the safe-haven yen for the week. Investors have been aggressive sellers of the Aussie in recent weeks, in large part due to heightened concerns about a hard landing for the Chinese economy. China is Australia's top export market.
"Failing a completely disastrous US employment print, we could easily test $0.6900 as regional woes (China) compound," said Stephen Innes, a senior trader at FX/CFD firm OANDA Australia and Asia Pacific. The New Zealand dollar fell in sympathy with the Aussie to $0.6365. New Zealand government bonds were unchanged with yields mostly flat along the curve. Australian government bond futures rose, with the three-year bond contract up 2 ticks at 98.240. The 10-year contract added 3.5 ticks to 97.3200.
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