SYDNEY (Reuters) - The Australian dollar slipped to a more than one-week low on Friday, while its New Zealand peer was toppled off a 19-month peak as investors dumped perceived riskier currencies on renewed worries about the health of the global economy.
The Australian dollar AUD=D4, often played as a liquid proxy for risk, went as deep as $0.7242, a level not seen since Nov. 5.
For the week, the Aussie is on track for a small loss, eroding some of the hefty gains made the week before.
The New Zealand dollar NZD=D4 stumbled to $0.6823 from$0.6915 touched on Thursday, a level last seen in March 2019.
But for the week, the kiwi is still up 0.8% and on track for its second consecutive gain as markets pared the chance of negative interest rates in the country.
Risk assets were pulled lower overnight by concerns that successful tests of a COVID-19 vaccine may not be enough to offset the economic damage wrought by the pandemic. [FRX]
Uncertainty around Australia’s relationship with China is another headwind for the Aussie after the Asian giant suspended imports of all timber from Victoria state.
China has already announced restrictions on other Australian imports including wine, coal, barley, copper ore and concentrate, sugar, and lobsters.
“Trade tensions between Australia and China are a downside risk to our forecast for AUD to lift to 0.75 by the end of the year. A slowing global economy is another risk,” said Kim Mundy, senior strategist at Commonwealth Bank of Australia.
Next week, all eyes will be on a dinner speech by Reserve Bank of Australia (RBA) Governor Philip Lowe on Monday.
The focus will also be on the labour market with three separate data releases - fortnightly payrolls figures which has been showing some weakness lately is due Tuesday, third-quarter wage price index on Wednesday and employment data for October on Thursday.
Government bond prices got a boost from safe-haven demand on Friday.
New Zealand government bonds <0#NZTSY=> rose, sending yields about 3-4 basis points lower across the curve.
Editing by Rashmi Aich
Our Standards: The Thomson Reuters Trust Principles.