(Recasts, updates prices throughout)
The Australian and New Zealand dollars were hammered on Friday as risk sentiment took a knock following steep losses in U.S. stock futures while weakness in the Chinese yuan weighed further.
The Aussie AUD=D3 , which is often played as a liquid proxy for the yuan, broke critical chart support of $0.7041 in late afternoon trading to be last down 0.7 percent at a near 33-month low at $0.7022. The losses intensified as the yuan slipped to a 22-month low of 6.9745.
E-Mini futures for the S&P 500 ESc1 skidded 1.1 percent as did FTSE futures FFIc1 , deepening Thursday's market rout.
For the week so far, the Aussie is now down 1.3 percent. If the currency slips below $0.7000 it will be the first time since February 2016.
The kiwi NZD=D3 fell to $0.6479 to be down 1.7 percent for the week. Major support is down at $0.6424, with resistance around $0.6620.
After a week devoid of Australian data the diary turns packed next week with home building approvals, retail sales, trade and the key consumer price numbers for the third quarter.
Analysts generally expect a subdued inflation outcome, in part due to new government subsidies for childcare which sharply reduced costs.
Annual underlying inflation is seen stuck around 1.8 percent to 1.9 percent, which would be the 11th straight quarter below the floor of the Reserve Bank of Australia's (RBA) 2-3 percent target range.
"The general picture will remain one of inflation tracking along the bottom end of the RBA's target band," said CBA chief economist Michael Workman.
"That sort of outcome, against a background of solid economic activity data, will probably leave the RBA happy to say the next rate move is 'up'. But also leave them signalling any move as some way off."
The RBA has held rates at 1.5 percent since mid-2016 and markets imply only a 50-50 chance
0#YIB: of a hike by December next year.Australian government bond futures held near six-week highs having benefited from safe-haven flows all week. The three-year bond contract YTTc1 was flat at 97.945, while the 10-year contract YTCc1 firmed half a tick to 97.3850.
Yields on 10-year New Zealand government bonds
0#NZTSY= were down 10 basis points for the week at 2.585 percent.<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ ECB sticks to stimulus exit, plays down "bunch of uncertainties"
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