SYDNEY/WELLINGTON: The Australian and New Zealand dollars were picking up the pieces on Thursday after taking a beating overnight when coronavirus shutdowns in France and Germany spooked investors out of growth-sensitive assets globally.
The Aussie was taking stock at $0.7066, having shed 1.1% overnight to leave behind a peak of $0.7157. Still, it did manage to edge up from a trough of $0.7038 thanks to a bounce in US stock futures.
It also avoided a break of major chart support at $0.7021, which would have been very bearish technically, but needs to get back above $0.7115 to be on firmer footing.
The kiwi dollar steadied at $0.6652, after falling 1.1% overnight from a top of $0.6720. It found support around $0.6630 but faces immediate resistance at $0.6660.
Both currencies had been sideswiped by a classic rush for safety as surging Covid-19 cases forced economic shutdowns that threatened market hopes for a global recovery.
Bonds drew some safe haven support from the angst, with three-year futures marching all-time highs at 99.845 before edging back a touch to 99.835.
While New Zealand and Australia have been relatively successful in containing the virus at home, both rely heavily on commodity exports leveraged to global activity.
“There is a high risk of a double-dip recession in the Eurozone because governments are reinstating broad-based lockdown measures,” said CBA economist Kim Mundy.—Reuters
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