The Australian dollar hovered around 3-1/2 month lows on Thursday in the wake of slower-than-expected inflation data, while its New Zealand cousin paused near a five-month trough as Jacinda Ardern was sworn in as Prime Minister. The Aussie dollar had steadied for the moment at $0.7710, but that followed four straight sessions of losses which took it as low as $0.7687 - a level not seen since mid-July.
The latest lurch lower came after official data out on Wednesday showed Australian consumer prices rose 1.8 percent for the year to September, below expectations for a 2.0 percent increase. The figures, which showed core inflation has undershot the central bank's 2-3 percent target for almost two full years,
reminded financial markets that interest rates are set to remain low for months yet. Across the Tasman Sea, the New Zealand dollar was down 0.3 percent at $0.6873, having touched $0.6861 on Wednesday which was a level not seen since mid-May. The kiwi has been under heavy pressure since the country's left-leaning Labour Party led by Ardern won control of government with the help of two minor parties. New Zealand government bonds were a touch softer with yields half a tick higher at the long end.
Australian government bond futures were mixed, with the three-year bond contract flat at 97.920. The 10-year contract slipped 2.5 ticks to 97.1900. The Aussie also took collateral damage from a decision by the Bank of Canada (BoC) to dampen expectations for another interest rate hike this year, sending the loonie diving to a more than three-month low.