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SYDNEY: The Australia and New Zealand dollars were again pressured by a sliding yuan on Tuesday as investors waited to see if Beijing would step up to rescue its currency, while mixed local data provided little lift.

The Aussie slipped 0.2% to $0.6458, having fallen 0.7% overnight to as low as $0.6443.

Support is looking shaky at $0.6434, and resistance is plenty at the 7-, 14- and 21-day moving averages from $0.6490 to $0.6523. The kiwi dollar fell 0.4% to $0.5863, after dropping 0.6% overnight to as far as $0.5865.

In the broader foreign exchange market, the dollar was buoyant as political turmoil in France undermined the euro, while tariff risks and weakness in China’s economy sank the yuan, which hit a one-year low of 7.2970 per dollar on Tuesday.

“The CNY fall today indicates that China has greater tolerance for short-term yuan depreciation than expected.

This could spill over to the Aussie to produce fresh lows since Aug. 5, in the low 0.6400s,“ said Sean Callow, a senior analyst at ITC Markets.

The two antipodeans are often sold as a liquid proxy for the Chinese yuan, given Beijing’s status as Australia’s and New Zealand’s biggest trading partner.

Adding to the downbeat outlook, the Commonwealth Bank of Australia on Tuesday revised down their forecast for the Australian dollar next year, predicting it would decrease further to test the level of 60 cents.

Australia, NZ dollars start new month on back foot as yuan slides

Local data showed on Tuesday net exports added just 0.1% to Australia’s economic growth in the third quarter, but government spending - on defence and infrastructure - boosted growth by 0.7%, likely carrying the entire economy in the quarter.

All up, that leaves the economy on track for a pick-up in growth last quarter. Economists at Citi Australia revised up their estimate for GDP growth to 0.7% from 0.2% previously.

Data from New Zealand showed the terms of trade rose in the third quarter, with the net exports of goods proving to be a drag on GDP, justifying the aggressive rate cuts from its central bank.

The Reserve Bank of New Zealand has already chopped rates by 125 basis points to 4.25% and markets imply a slew of cuts in the new year with rates reaching 3.35% late next year.

The antipodeans also gave ground to the yen and hovered at multi-month lows as the Japanese currency gained broadly on the expectations that the Bank of Japan would raise interest rates again in December.

Against the Japanese yen, the Aussie and kiwi fetched 96.90 and 88.03 yen, respectively, both close to a 11-week low.

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