The Australian and New Zealand dollars hovered near recent lows on Monday as weakness in Chinese asset prices combined with concerns about global trade tensions to curb risk appetites. The Australian dollar dipped back to $0.7382, after running into resistance around $0.7415. It hit its lowest since early 2017 last week at $0.7323.
The New Zealand dollar was stuck at $0.6773, as the currency consolidated from its trip down to around $0.6737 on Thursday, the lowest since mid-2016. New Zealand government bonds were mostly flat.
Australian government bond futures edged higher, with the three-year bond contract up half a tick at 97.925. The 10-year contract rose 2 ticks to 97.3800. Australia's economic data was mixed and did nothing to alter expectations that interest rates will remain at record lows for many months to come.
Home prices across the country's major cities slipped for a ninth straight month in June as tighter lending standards stifled investment demand in Sydney and Melbourne, a trend that seems unlikely to reverse anytime soon.
Job advertisements fell in June and annual growth slowed sharply, hinting at some future softness in what has been one of the stronger sectors of the economy.
Yet factories seemed to be going strong with a CBA survey showing a marked pick-up in activity in June due partly to a jump in new export orders from Asia.
The Reserve Bank of Australia (RBA) holds its monthly policy meeting on Tuesday and is considered certain to keep rates at 1.5 percent, where they have been since mid-2016.
"Soft inflation pressures and a cooling housing market mean the RBA is in no rush to raise interest rates," said Elias Haddad, a senior currency strategist at CBA.
"It could adopt a more cautious tone with respect to the global growth outlook because of the recent increase in global trade tensions."
A Reuters poll found most analysts saw no policy change until well into next year. Interbank futures imply rates around 1.70 percent by the end of 2019, equal to an 80 percent probability of a hike.
"We retain a modest negative medium-term bias overall, but would not be surprised to see some underlying demand emerge around these levels," said ANZ economists in a research note.
A private survey of quarterly business opinion due on Tuesday posed some risk to the kiwi if the results were in line with recent monthly surveys.
An ANZ Bank survey last week showed firms' deepening pessimism as they struggled with skill shortages and revised regulations from the Labour-led government.
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