The Australian and New Zealand dollars extended losses on Friday and were poised to end the week in the red amid worries about escalating tariff tensions between the United States and China.
The Australian dollar AUD=D4 was a tad weaker at $0.7258 after three straight sessions of declines and was at its lowest level since Aug. 24. The Aussie is now within spitting distance of a more than 1-1/2 year trough of $0.7203 touched earlier in the month.
For the week, the currency is set to end 0.9 percent lower. The New Zealand dollar NZD=D4 eased 0.1 percent to $0.6648 from Thursday's high of $0.6717. For the week, the kiwi was so far down 0.7 percent.
The spectre of a full-blown Sino-U.S. tariff war has weighed on the antipodean currencies since the start of the year.
The Aussie has fallen more than 7 percent so far in 2018 while its New Zealand cousin has lost over 6 percent in that time.
The currencies were knocked lower late Thursday on a report U.S. President Donald Trump told aides he is ready to impose tariffs on $200 billion more in Chinese imports as soon as a public comment period on the plan ends next week.
"Investor focus will remain on the global trade issue as we move into the weekend," said Nick Twidale, Sydney-based analyst at Rakuten Securities.
"President Trump's latest announcement is being felt around the world and there's no doubt that China will look to reciprocate with action aimed back at the United States," he added.
"One school of thought is that we'll see even more protectionist rhetoric from the U.S. administration as we move closer to the mid-term elections."
Analysts said emerging market currencies were the most at risk from an escalation in the trade war. The Aussie is seen as a liquid proxy for emerging market growth and has become a favourite whipping boy for traders as tensions simmer.
In Australia, investors will be focussed on a deluge of macroeconomic data due next week including July retail sales on Monday, central bank monthly policy meeting on Tuesday and second quarter gross domestic product (GDP) Wednesday.
The Reserve Bank of Australia (RBA) is widely expected to leave rates at record lows 1.50 percent awaiting a revival in inflation. Economists expect GDP growth to slow a bit to 0.7 percent after first-quarter's brisk pace of 1.0 percent.
New Zealand government bonds
0#NZTSY= gained, with yields on the long-end off about 1.5-2 basis points.Australian government bond futures rose, with the three-year bond contract YTTc1 up 3.5 ticks at 98.005. The 10-year contract YTCc1 added 4 ticks to 97.470.
