The Australian and New Zealand dollars bounced off multi-week troughs versus the euro on Monday on persistent worries about Greece but held near lows against their US counterpart. The euro fell to A$1.4313, from a two-month peak of A$1.4386. It has slipped more than 3 percent this year, with the decline accelerating recently, due to mounting concerns about Greece and its debt crisis.
The Australian dollar was steady at $0.7656, a whisker away from a six-week trough of $0.7618 touched last week. It shed 3.3 percent in May, in part due to US dollar strength on rising expectations that the Federal Reserve will lift rates this year. Also undermining the Aussie was unimpressive economic data at home, suggesting the Reserve Bank of Australia may not be done cutting interest rates.
"The economy is still struggling to break out of its soft patch and that keeps alive the chance of another rate cut eventually by the RBA," said Joseph Capurso, a strategist at Commonwealth Bank of Australia. A private-sector gauge of Australian inflation stayed benign in May, while building approvals fell 4.4 percent in April. A government measure of wages and salaries showed a rare dip in the first quarter and annual growth of a scrooge-like 1.4 percent.
The RBA holds a policy meeting on June 2 and is seen certain to hold steady, having cut rates to an all-time low of 2.0 percent just a month ago. Interbank futures imply around a 50-50 percent chance of a further easing by September, in part due to a bleak outlook for business investment. Australian government bond futures were at one-month highs, with the three-year bond contract steady at 98.100. The 10-year contract eased 1 tick at 97.2700. The New Zealand dollar was on the defensive at $0.7100 in subdued trading, having touched a five-year low of $0.7072 in early trade. New Zealand financial markets were closed for a public holiday.
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