The Australian and New Zealand dollars were on the ropes on Tuesday as worries about falling Chinese assets and rising global trade tensions slugged export-sensitive currencies.
The Aussie dollar AUD=D3 was pinned at $0.7345, having hit an 18-month trough around $0.7311 overnight.
It has now shed over three cents in the past month and is approaching the $0.7160 nadir from December 2016. If that cracks, the currency will be at depths not seen since May 2016.
The kiwi is already there, having touched its lowest since May 2016 at $0.6688 NZD=D3 . It was last trading at $0.6698, with $0.6576 the next major chart target.
Investors have been selling both currencies as a liquid proxy for Chinese assets which have been beset by fears an escalating trade conflict with the United States would stunt China's economic growth.
China's yuan CNY=CFXS slid past 6.7 per dollar on Tuesday for the first time in almost a year, while the blue chip CSI300 Index .CSI300 hit its lowest since May 2017.
Adding to the pressure has been a run of upbeat U.S. economic data which only underlined the outlook for higher interest rates there.
The Reserve Bank of Australia (RBA), in contrast, kept rates at record lows of 1.5 percent at its monthly policy meeting on Tuesday and showed no hint of hiking anytime soon.
It also acknowledged the decline in the Aussie, dropping previous warnings that an appreciation would harm growth.
"This suggests the RBA is happy with the recent drop and with the backdrop of increased concern about the direction of international trade policy," said Robert Rennie, global head of market strategy at Westpac.
"Our measures of fair value remain closely tethered to $0.74 suggesting the recent drop sits well within fundamental drivers."
Not helping the kiwi was a quarterly survey of business confidence showing sentiment had plunged to a seven-year low as firms worried about profitability, risking slower economic growth for the rest of the year.
"A stronger USD took charge overnight on the back of divergent economic data that shows the U.S. economy continuing to outperform," said Philip Borkin, senior macro strategist at ANZ Bank.
"Some short-term technical indicators suggest the kiwi is now starting to look oversold, but momentum is all one way right now."
An upcoming auction for dairy could add to the pressure given futures markets suggest prices for whole milk powder - a key export for New Zealand - would fall around 1 percent.
New Zealand government bonds
0#NZTSY= gained, sending yields 4 basis points lower at the long end of the curve.The general shift to safety helped Australian government bond futures rally to multi-month peaks. The three-year bond contract YTTc1 was near its highest since December at 97.955, while the 10-year contract YTCc1 added 1 tick to 97.4050.
