The Australian and New Zealand dollars were subdued on Tuesday as concerns about the outlook for Chinese, and global, growth cast a shadow over commodity-sensitive currencies.
The Aussie dollar AUD=D3 was pinned at $1.7154, having steadied above a $0.7140 low hit overnight. Near-term resistance lies around $0.7180 and $0.7205.
China reported growth had slowed last quarter and the IMF trimmed its forecasts for the global economy for this year and next.
In its second downgrade in three months, the IMF also cited a bigger-than-expected slowdown in China's economy and a possible "No Deal" Brexit as risks to its forecasts.
Gareth Aird, a senior economist at Commonwealth Bank of Australia, argued that further stimulus by China would support prices for Australia's main commodity exports.
Iron ore, for instance, has hit its highest in almost 11 months on expectations of solid demand from Chinese steel mills.
"Our optimism largely stems from our expectation that Chinese policymakers will respond to the slowdown with targeted policy measures to support lagging sectors," Aird said in a note.
"The combination of rising export volumes and broadly steady prices means that Australia's trade balance should continue to post large monthly surpluses."
Across the Tasman, the kiwi dollar NZD=D3 dipped to $0.6725, having already eased for four sessions in a row. Support comes in at $0.6714, with stiff resistance up at $0.6785.
The currency has been pressured as speculators wager that data on consumer prices due on Wednesday will be weak enough to narrow the odds on a policy easing from the Reserve Bank of New Zealand.
Median forecasts are that the CPI was unchanged in the fourth quarter, from the previous quarter, held down by seasonal falls in vegetable prices and a drop in petrol.
That would see the annual pace of inflation slow to 1.8 percent, from 1.9 percent.
"This week's inflation report is shaping up to be a pivotal one for monetary policy," said Jarrod Kerr, chief economist at Kiwi Bank. "We and the market expect a flat reading, short of the RBNZ's forecast of 0.2 percent."
"The market is already pricing in a 50 percent chance of a rate cut by the end of the year. We don't expect any movement this year," he added, in part because rising rents and construction costs were keeping housing-related inflation ticking along.
New Zealand government bonds
0#NZTSY= were little changed on Tuesday, with two-year yields NZ2YT=RR of 1.71 percent still below the 1.75 percent cash rate.Australian government bond futures were a shade lower, with the three-year bond contract YTTc1 off 1.5 ticks at 98.195. The 10-year contract YTCc1 eased half a tick to 97.6850.
