SYDNEY/WELLINGTON, May 26 (Reuters) – The Australian and New Zealand dollars nursed losses versus their U.S. counterpart on Friday following a commodities rout, but were on track for hefty weekly gains against a soggy pound.
The Australian dollar dropped to $0.7431, the weakest this week, having skidded more than a full U.S. cent in one session.
Much of the fall in the Aussie came after crude oil prices tumbled 5 percent on Thursday, along with a slide in prices of iron ore, Australia‘s top export earner.
Chart resistance at 75 cents also undermined the Aussie.
It lost even more ground against the Kiwi dollar to NZ$1.8359, to be down 2.4 percent for the week. If sustained, it would be the second-largest loss this year.
The Kiwi dollar was a clear outperformer against its Aussie cousin, which slipped to a three-month trough of NZ$1.0571 . The Aussie, last at NZ$1.0589 was on track for a 1.7 percent drop this week.
“Given the resilience in milk prices and the recent wobbles in iron ore, high NZD trade balance notwithstanding, a break of NZ$1.06 should see significant buy-in which could pressure AUDUSD towards $0.7400 level,” said OANDA’s Innes.
New Zealand government bonds rose, sending yields five basis points lower on the long end of the curve.