The Australian dollar eased on Wednesday after fourth-quarter data showed construction spending unexpectedly fell, adding to evidence of slowing domestic economic momentum while New Zealand's currency hovered near a 2-1/2 week peak.
The Aussie AUD=D4 slipped 0.1 percent to $0.7180 as official figures showed the value of construction work done slumped 3.1 percent in the December quarter, confounding expectations for a 0.4 percent rise.
This marked the second straight quarter of sharp falls and challenges the Reserve Bank of Australia's (RBA) dogged optimism growth will pick up this year.
"Australia’s construction activity...will be a drag on gross domestic product (GDP) growth," ANZ said in a note.
"While there is still a considerable amount of work in the pipeline for public engineering and residential construction, the weakness in H2 2018 has been more marked than we expected," the bank said.
"And if this points to an earlier and sharper turn in the cycle than we expected, it would suggest downside risks to our outlook."
The GDP report for the December quarter is due on March 6 and economists generally expect annual growth of around 2.7 percent from 2.8 percent in the third-quarter.
The Aussie has become more sensitive to macro data since the RBA opened the door for a policy easing earlier this month, effectively abandoning its long-held tightening bias.
Across the Tasman Sea, the New Zealand dollar NZD=D4 took a breather near a 2-1/2 week peak at $0.6889 after three straight sessions of gains. The currency had rallied on signs of progress in the protracted Sino-U.S. trade dispute which is seen as a positive for world trade and commodity prices.
Major chart resistance for the kiwi is seen around $0.6942, with immediate support at $0.6864.
New Zealand government bonds
0#NZTSY= eased, sending yields higher across the long-end of the curve.Australian government bond futures gained, with the three-year bond contract YTTc1 and the 10-year contract YTCc1 rising 2.5 ticks each to 98.365 and 07.935 respectively.
