Australia, NZ dollars at multi-week lows amid global sell-off

The Australian dollar stumbled to a near two-month low on Monday amid a global selloff in risky assets and bonds as concerns about faster rate hikes in the United States and other developed economies spooked investors.

The Australian dollar held at $0.7922 after sliding to as low as $0.7891, a level not seen since Jan. 12. The currency fell every single day of last week to record its worst weekly performance since November 2016.

It fell 1.5 percent on Friday alone, its biggest one-day percentage drop since last May.

Key chart support for the Aussie lies at $0.7892 while near-term resistance is seen around $0.7985.

Investors were spooked by a U.S. payrolls report on Friday which showed wages grew at their fastest pace in more than 8-1/2 years, fuelling inflation expectations .

Futures markets <0#FF:> reacted by pricing in the risk of three, or even more, rate rises from the Federal Reserve this year.

"The selling in the Aussie doesn't feel like it is anywhere near exhausted yet," said Greg McKenna, chief market strategist at AxiTrader.

"U.S. non-farm payrolls and the associated wages data was strong enough to worry traders that the Fed may need to increase rates more than the three times," he added. "So it's going to be a nervous start to the week for traders across all markets."

The New Zealand dollar too kicked-off the session miserably at two-week lows of $0.7278.

It skidded 1.3 percent on Friday for it worst single-day showing since last October.

Policymakers at both Australia and New Zealand are widely expected to hold interest rates at record lows for a long time to come even as central banks globally have either already begun or signalled a path to tightening.

The Reserve Bank of Australia (RBA) meets on Tuesday where it is all but certain to keep rates at 1.50 percent. The Reserve Bank of New Zealand (RBNZ) is just as likely to hold its official cash rate at 1.75 percent on Thursday.

Any hint the RBNZ was considering pushing back its rate hike projections could further weigh on the kiwi.

There are other events to look out for too, starting with a global dairy auction in the wee hours of Wednesday followed by fourth-quarter NZ labour data.

In Australia, RBA Governor Philip Lowe will give a speech late on Thursday followed by the statement on monetary policy on Friday, which provides a comprehensive assessment of the economy and forward-looking forecasts on employment and inflation.

New Zealand government bonds <0#NZTSY=> eased, sending yields 4 basis points higher at the long end of the curve and 1.5 basis points at the short-end.

Australian government bond futures slipped too, with the three-year bond contract YTTc1 down 4 ticks at 97.785. The 10-year contract YTCc1 fell 8 ticks to 97.090. Cash 10-year yields were at 2.88 percent , just 2 basis points above comparable U.S. yields.

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