The Australian dollar is set for a subdued weekly performance as traders wager on a small chance of a cut in the country's official cash rate while its New Zealand cousin retreated from a near six-month top.
The Australian dollar AUD=D4 was last at $0.7229 on Friday after three straight days of losses took it to a three-week trough of $0.7192.
It is now down about 1 percent so far this week, erasing all of the gains made the prior week.
The Aussie has stumbled about 7 percent this year as investors use the currency as a proxy for Chinese growth. And, with China's outlook clouded by an ongoing trade war with the United States the Aussie has, in turn, suffered collateral damage.
Also weighing on the Aussie, data out earlier this week showed economic growth slowed more sharply than expected last quarter.
"There is every chance that AUD/USD takes a fresh look at the 0.70 level in first-half 2019 and potentially spends some time below," said Ray Attrill, currency strategist at National Australia Bank.
"There is a lot of focus on Australia's very weak housing market as prices fall deeper into negative territory; economic momentum is softening relative to NZ; plunging oil prices are negative for Australia's terms of trade; underlying inflation is not moving closer to the RBA’s target; and Australia faces some political uncertainty and a likely change of government next year."
Data out on Wednesday showed Australia's economic growth slowed more sharply than expected last quarter, prompting investors to price in a small chance of cut next year.
0#YIB: .In a dinner speech on Thursday, Reserve Bank of Australia (RBA) Deputy Governor Guy Debelle held out the possibility of a cut in rates, if needed while repeating the Bank's standard line that the next move in rates was more likely up than down.
The New Zealand dollar NZD=D4 paused at $0.6886 after two straight days of losses. It started the week on a firm footing, climbing to $0.6969 but soon retreated amid a global markets rout. For the week, the currency is barely changed.
Technical analysts see critical chart support at $0.6850. The kiwi has lost about 3 percent of its value so far this, paring some of their earlier losses on better-than-expected economic data lately.
