The Australian and New Zealand dollars touched 11-year lows on Monday as a slump in oil prices, coupled with coronavirus fears, drove investors to the safety of bonds, driving yields to unseen levels.
The commodity-linked Australian dollar was last down 1.4% at $0.6547 after falling as much as $0.6311, a level not seen since early 2009.
Panic-stricken investors rushed to the safety of bonds as oil prices collapsed 30% after Saudi Arabia stunned markets with a pledge to slash prices and boost production following the collapse of an OPEC supply agreement.
At one point, the Aussie was down 6% against the safe-haven yen, while the Kiwi plunged more than 7%.
The Aussie has been under pressure since mid-January as more coronavirus cases emerged in China, Australia's No.1 trading partner. A rate cut last week by the Reserve Bank of Australia (RBA) to a record low of 0.5% further sent the currency spiralling lower.
Yields on Australian three-year bonds hit an all-time low of 33 basis points, while those on 10-year paper went as deep as 55 basis points.
The New Zealand dollar was last down 1.4% at $0.6272 after earlier hitting an 11-year trough of $0.6008.
There have been five confirmed cases of coronavirus in New Zealand so far. The government on Monday extended its restriction on travellers from China and Iran by another seven days. Reserve Bank of New Zealand Governor will give a speech on Tuesday about how the bank would assess and use unconventional monetary policy tools if needed.
RBNZ is set to make its next interest rate decision on March 25.
Australia has seen a worrying increase in coronavirus cases in the past couple of days, though the majority were travellers who caught the virus abroad, with only one instance of community transmission.
The Australian government is set to unveil a fiscal stimulus package this week in a bid to stave off recession.
While details of the measures are still being finalised, media reported that the planned A$10 billion stimulus would include wage subsidies and cash injections for businesses.
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