The Australian dollar remained under pressure on Thursday after suffering its biggest one-day fall in nearly a month as a broadly firmer greenback took a toll on commodity prices. Oil and copper fell overnight, while iron ore also slipped, prompting investors to lighten up on a currency that had been on a tear recently. Even with Wednesday's 1.2 percent fall, the Aussie is still up around 5 percent this month.
It last stood at $0.7510, down 0.3 percent on the day and pulling further away from an 8-1/2 month high of $0.7681 set on Friday. The New Zealand dollar hovered just above 67 US cents after four days of declines. It found a bit of support when New Zealand's monthly trade surplus came in higher than expected.
Traders said the Aussie could consolidate around the 75 US cent level in the lead-up to the long Easter weekend. "Thin liquidity, however, increases the risk of currency pairs gapping. Momentum suggests downside risk for AUD and NZD as commodities fall," analysts at ANZ wrote in a note to clients. The greenback found traction this week after a string of Federal Reserve officials raised the prospect of a hike in US interest rates as early as next month.
Government bonds fared better, thanks to a positive lead from US Treasuries. New Zealand government bond prices edged up, sending yields 2.5 basis points lower along the curve. Australia three-year bond futures rose 4 ticks to 98.020, while the 10-year contract put on 6.5 ticks to 97.4150.