The Australian and New Zealand dollars were subdued on Monday following on from last week's disappointing economic data from China, a key trading partner for both countries. There were also concerns over future investment flows from the Asian giant after the Australian government's decision last week to block the sale of its electricity network to two Chinese bidders.
The Australian dollar was unchanged at $0.7643, having slipped 0.7 percent on Friday, though that was still not far from a 3-1/2 month high of $0.7765 hit last week. Analysts expect the Aussie to trade within a $0.7545-$0.7755 band this week. "AUD may struggle a bit, but with little reason at this stage to suggest much deeper corrections lower," said Ray Attrill, co-head of forex strategy at National Australia Bank.
The New Zealand dollar was trading down 0.2 percent at $0.7192 on Monday as risk trades were reduced in the wake of weak US and China data, said Stuart Ive, private client manager at OM Financial. He said a raft of domestic and global data will be key for the New Zealand dollar this week, including employment, a global dairy auction and a reading on US inflation. He expects the Kiwi to hover around the $0.7200 mark ahead of those events. New Zealand government bonds gained, sending yields 3.5 basis points lower across the curve. Australian government bond futures were also higher, with the three-year bond contract up 1 tick at 98.62. The 10-year contract rose 1.5 ticks to 98.095.