The Australian and New Zealand dollars were under pressure again on Friday as weakness in Asian stock markets kept the U.S. dollar well bid, though their losses for the week were relatively moderate given the sheer volatility of equities.
The Aussie AUD=D3 was a shade softer on the day at $0.7068, leaving it down 0.7 percent on the week so far. Support has proved solid around $0.7040/50 but the currency needs to break $0.7160 to trigger a proper rally.
The kiwi NZD=D3 hovered at $0.6517 to be down 1.1 percent for the week. Major support is down at $0.6424, with resistance around $0.6620.
The Aussie fared better on the euro, which dropped to A$1.6074 EURAUD= after the head of the European Central Bank reaffirmed plans to start unwinding stimulus but acknowledged that economic momentum had weakened.
The pound also took a dive to A$1.8120 GBPAUD= as investors fretted about the lack of progress on a Brexit deal.
Helping sentiment has been the resilience of some key commodity exports, particularly iron ore and coal. Prices for iron ore have risen for four days straight to reach their highest since March amid solid Chinese demand and tightening supply.
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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