The Australian and New Zealand dollars bounced from recent lows on Monday, but sentiment remained jittery as investors fear an ongoing tariff war between the United States and China could derail global growth.
The antipodean currencies got a small boost from a struggling greenback as U.S. jobs data on Friday showed a slower-than-expected growth in wages, suggesting the Federal Reserve may go slow on future rate hikes.
That led the Australian dollar AUD=D4 0.5 percent higher to $0.7459. The Aussie was still within spitting distance of a 1-1/2-year trough of $0.7311 touched last week.
The Aussie gained 0.2 percent last week after ending June more than 2 percent lower.
Its New Zealand cousin NZD=D4 was barely changed at $0.6836 on Monday, but slightly above a two-year trough of $0.6688 set last week.
The kiwi slipped 1.9 percent last week, its worst weekly showing since October 2017.
"Aussie dollar traders have to take account of things like the collapse in copper and industrial metals lately and what that might imply about the outlook for Chinese and global growth," said AxiTrader chief market strategist Greg McKenna.
U.S. tariffs on $34 billion worth of Chinese goods and China's retaliation have together weighed on commodity prices, particularly base metals, sending copper to near one-year lows.
"It is these residual concerns which are the handbrake on the AUD/USD rally, though it can still appreciate if the USD falls out of bed."
China is Australia's single biggest export market and the world's largest buyer of commodities, making the Australian economy particularly vulnerable to any slowdown there.
Indeed, forex analysts recently trimmed their forecasts for the antipodeans citing the tariff dispute.
New Zealand government bonds
0#NZTSY= were largely flat, though yields were 1.8 basis points lower towards the shorter end of the curve.Australian government bond futures gained, with the three-year bond contract YTTc1 up 1 tick at 97.925. The 10-year contract YTCc1 inched up 2 ticks to 97.385.
