The Australian and New Zealand dollars receded to multi-month lows on Friday as investors continued to unwind carry trades, putting them on track for their largest losses in months. The Aussie skidded to $0.9060, its weakest since March, having erased all the gains made Thursday when local data showed employment surged by the most on record. The Aussie has tumbled more than 3 percent this week, its biggest decline in more than a year, to be last at $0.9074. Much of the pressure came from a rising US dollar as investors seem to be repricing the risk the Federal Reserve could sound more hawkish at its policy meeting next week.
"The Aussie sell-off this week had nothing to do with news flows," said Sean Callow, a senior strategist at Westpac. The Aussie slipped to 97.18 yen, from a 15-month peak of 98.83, while the euro rose another third of a cent to A$1.4254 to show a jump of 3 percent this week. It touched a 15-month trough last Friday. Across the Tasman, the New Zealand dollar skidded to its lowest since February at $0.8165. The currency, which had already been struggling, was further pressured after the Reserve Bank of New Zealand signalled this week it would wait longer before resuming its rate rise cycle.
It stayed on the backfoot against most currencies, and was stuck near one-week lows against the euro and sterling. Against a currency basket, it was at 78.41, near a six-month trough of 78.28 hit on Thursday. The kiwi was supported around NZ$1.1110 against the Aussie, recovering from a slide to around NZ$1.1225 on Thursday, as the Aussie hobbled across the board. But some analysts see a fall towards NZ$1.1660 as investors price in the possibility of an Australian rate rise next year just as the RBNZ's monetary tightening pace slows.