The Australian dollar was on the defensive on Thursday after a disappointing reading on Chinese manufacturing overshadowed a solid report on domestic business investment. Not helping were comments from President Donald Trump's chief trade negotiator that the United States would need to maintain the threat of tariffs on Chinese goods for years even if a deal was reached on trade.
The Aussie dollar had lapsed to $0.7142 after failing to clear resistance around $0.7200 overnight. It has support just under $0.7130 with a major chart bulwark at $0.7070. The New Zealand dollar was in similar shape, having waned to $0.6839 from a top of $0.6902 on Wednesday. It has support around $0.6825 and $0.6758.
Both declined after surveys suggested factory activity in China shrank for the third straight month in February, while the service sector also slowed a little. In debt markets, New Zealand government bonds eased a touch, nudging yields up 1 to 2 basis points.
Australian government bond futures also softened, with the three-year bond contract off half a tick at 98.355. The 10-year contract fell 3.5 ticks to 97.8950. The manufacturing PMI was the lowest in three years and export orders fell to levels not seen since the global financial crisis. The surveys deflated what had been an upbeat reaction to figures showing Australian business investment rose 2.0 percent in the December quarter, the largest increase in three years and handily above forecasts.
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