The Australian dollar got a brief lift on Wednesday when data showed the domestic economy grew far faster than expected last quarter, though sentiment was still stained by a sea of red ink in emerging markets.
The Aussie dollar AUD=D3 was even having trouble holding at $0.7200, after hitting a 20-month low of $0.7157 overnight, and never came near threatening chart resistance at $0.7236.
The fleeting reprieve came as figures showed the Australian economy grew a brisk 0.9 percent in the second quarter, while annual growth raced to its highest in almost six years at 3.4 percent.
The result easily topped market forecasts and even outpaced the United States' stellar expansion.
"The surge in GDP growth in the first half of the year meant that the Australian economy notched up 27 years without a recession in style" said Paul Dales, chief Australia & New Zealand economist at Capital Economics.
"But with house prices falling, credit conditions tightening and the support from the global economy fading, the second half of the year probably won't be quite as good."
Indeed, interest rate futures
0#YIB: barely budged on the data with investors still not convinced the Reserve Bank of Australia (RBA) will hike rates until sometime in 2020.Speaking late Tuesday, RBA Governor Philip Lowe emphasised a hike was still some time away and welcomed the recent fall in the Aussie currency as a fillip to growth and inflation.
Neither was the global background helpful for the Aussie with strains in emerging markets and a broadly rising U.S. dollar pressuring commodity prices.
Shanghai copper futures sank to 14-month lows overnight amid fears the Sino-U.S. trade dispute would ultimately threaten global growth.
The same worries were undermining the New Zealand dollar NZD=D3 which hit its lowest point since early 2016 at $0.6530, before steadying a little at $0.6547. The next stops were troughs at $0.6419 and $0.6348 from January 2016.
A global auction of dairy, the country's single biggest goods export, saw prices fall slightly though a sharp rise in volumes sold suggested demand was picking up.
New Zealand government bonds
0#NZTSY= tracked U.S. Treasuries lower following strong U.S. manufacturing data overnight.Australian government bond futures took a further knock on the upbeat GDP numbers and the three-year bond contract YTTc1 eased 3.5 ticks to 97.965. The 10-year contract YTCc1 dipped 4.5 ticks to 97.4300.
