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[SYDNEY] The Australian and New Zealand dollars dropped to multi-year lows on Tuesday as another slide in oil prices and global growth concerns fuelled a flight to safety.
The Australian dollar shed half a US cent to its weakest in more than four years at US$0.8247, having made fresh lows in the last five sessions. It was last at US$0.8251, just ahead of the next chart target at US$0.8200.
Michael Turner, a strategist at RBC Capital Markets, said the Aussie came under renewed pressure after National Australia Bank (NAB) changed its interest rate forecast.
NAB joined a growing club of financial institutions that believe the Reserve Bank of Australia (RBA) will have to ease again.
Markets 0#YIB: are fully pricing a cut to a record low of 2.25 per cent by mid-2015.
The Aussie has tumbled more than 5 cents in a month, in part due to falling commodity prices and a diverging interest rate outlook between the United States and Australia.
The Antipodean currencies also suffered losses against the safe-haven yen. The Aussie slipped as far as 99.77 yen , its lowest in a month. Its New Zealand peer slid to 92.26 yen, retreating from a seven-year high of 93.97 set just on Friday.
The New Zealand dollar was holding around US$0.7631 and looking vulnerable, after it breached a key support level to reach a two-and-a-half year low of US$0.7624.
Fears of a hefty cut to a forecast dairy payout in New Zealand and a further dovish central bank monetary statement at Thursday's policy review weighed on the currency.
Near term support is seen at US$0.7630, with resistance initially at US$0.7710.
New Zealand government bonds rose, sending yields around 2 basis points lower.
The rush to safety boosted Australian government bond futures to near two-year highs, with the three-year bond contract up 5 ticks at 97.700.
The 10-year contract added 6 ticks to 96.950. The premium paid by Australian debt over Treasuries has shrunk sharply in recent weeks as the outlook for rates diverged, further undermining the Aussie.