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Aussie falls for a 4th day, NZ$ near 2-month peak
[SYDNEY] The Australian dollar slipped for the fourth straight session on Tuesday to a near 1-1/2 week low on continued weakness in the price of iron ore - the country's top export earner.
The Australian dollar edged 0.17 per cent lower to US$0.7424, a level not seen since May 19.
Chinese iron ore futures have been on a steady decline with the most-active iron ore contract on the Dalian Commodity Exchange diving 28 per cent since mid-March.
"The Aussie is under the gun more so from a general view that downside risk to the commodity space abounds," said Stephen Innes, senior trader at Oanda.
"With this dispirited near-term view for iron ore prices... the Aussie appears poised for a significant move lower," he added.
Separately, official data from the Australian Bureau of Statistics (ABS) on Tuesday showed a cooling off in the country's biggest-ever home-building boom as approvals for new projects sank 17.2 per cent annually in April.
The data showed a better-than-expected monthly gain of 4.4 per cent in April, but follows a hefty loss of 10.3 in March.
"It's a small monthly gain in a downward trend," said Michael Turner, a strategist at RBC Capital Markets.
"We are a bit more circumspect about overall growth - the consumer is still a bit more conservative and construction is slowing down."
Across the Tasman Sea, the New Zealand dollar stood at US$0.7048 on Tuesday, coming off an over two-month high of US$0.7089 hit on Monday.
"(It's) obviously had a decent run so perhaps it's just a case of a little bit of profit-taking, a little bit of a stronger US dollar theme coming through in a market where it's been generally quiet for news flow," Phil Borkin, senior economist at ANZ.
Investors braced for the Reserve Bank of New Zealand's half-yearly report on financial stability on Wednesday. It is likely to flag ongoing risks in the housing sector, and provide an improved outlook for dairy sector - the country's biggest goods export.
"It would take some surprise on the macroprudential front to really shake currency markets up," Mr Borkin said.
New Zealand government bonds firmed, sending yields down one basis point.
Australian government bond futures climbed, with the three-year bond contract up two ticks at 98.31. The 10-year contract rose 2.5 ticks to 97.580.