The Australian and New Zealand dollars nursed losses against their US counterpart and yen on Friday as global growth worries resurfaced, putting them on track for heavy weekly falls. The Australian dollar held at $0.7530, having slipped 1.2 percent on Thursday and pulling away from a nine-month peak of $0.7723 touched last week. Much of the retreat is due to heavy bank share selling globally, with lenders in Europe and Japan in particular struggling against negative interest rates.
Also undermining appetite for commodity currencies was a large drop in copper prices. A steep rise in the yen has also caught out many investors who had borrowed yen to build long US dollar positions early in the year. The short-covering rippled through all the yen crosses with the Aussie sliding 2.6 percent on Thursday to be last at 82 yen..
It was on track with a weekly fall of 4.1 percent, the second largest this year. Likewise, the New Zealand dollar dropped 2 percent to a seven-month trough in the last session to be last at 75.85 yen. . It has skidded more than 4 percent so far this week. Against the US dollar, the kiwi stood at $0.6789, from a peak of $0.6864 the previous day. It has lost 1.7 percent this week.
New Zealand government bonds gained, sending yields 2 basis points lower at the short end of the curve and 5 basis points lower at the long end of the curve. Australian government bond futures rose, with the three-year bond contract up 4 ticks at 98.210. The 10-year contractrose 5 ticks to 97.6000, while the 20-year contract added 6 ticks to 97.0200.