The Australian and New Zealand dollars were under the cosh on Friday after upbeat US economic figures lifted the US dollar, putting them on track to end the week sharply lower. The Aussie fell to a fresh three-year low of $0.8889, from $0.8924 in early trade after key option barriers at 89 cents gave away. It was on track to post the largest weekly loss in two years at 4 percent and last stood at $0.8908.
"It will go well into the 88 cents range today because of USD strength," said a trader at a European bank in Singapore, seeing the influential US nonfarm payrolls report due out later on Friday as another worry for the Australian dollar. The New Zealand dollar also nursed its wounds at $0.7900, after an overnight battering which had sent it to a two-week low of $0.7853. The currency is down more than 2 percent this week as it awaits the US jobs numbers.
The Aussie also struck fresh three-year lows on the euro and pound and broke below 69 on a trade-weighted basis, a level not seen since 2010. Swap rates now imply a 91 percent chance that rates will fall to a record low of 2.50 percent at the RBA's policy meeting on August 6, while a poll of 22 economists unanimously forecasts a cut.