SYDNEY, Aug 2 (Reuters) - The Australian and New Zealand
dollars hovered on Monday near recent lows against the greenback
as fears that China's regulatory crackdown could slow investment
flows and even its economy dogged the risk-sensitive currencies.
The Aussie was 0.04% lower at $0.7343 as a recent
survey showed factory activity in China grew at the slowest pace
in 17 months in July.
That leaves the currency's next support levels at about
$0.7317, in the vicinity of its July trough of $0.7289.
"A more broad-based regulatory crackdown will likely
accelerate foreign equity investment outflow from China and lead
to a weaker CNH," Commonwealth Bank of Australia analysts said.
"Significant weakness in CNH can also weigh on AUD, because
of its role as a proxy for emerging Asia."
Constantly shifting outbreaks of coronavirus and
accompanying restrictions are also expected to keep pressure on
the Aussie, with the Reserve Bank of Australia on Tuesday
expected to reverse last month's decision to taper its weekly
The New Zealand dollar was also faltering, down 0.34% at
$0.6953, its lowest since July 29, before recovering to
stand at $0.6964. It faces stiff resistance at $0.7015 and
But traders expect second-quarter labour market data due on
Wednesday to be a potential catalyst for gains in the kiwi if it
adds pressure to the Reserve Bank of New Zealand to hike rates
"The labour market report in New Zealand is expected to
provide the final ammunition for the RBNZ to hike in August,
while the RBA is expected to reverse its plans for taper amid a
sharp slowing in the economy," said Richard Yetsenga, chief
economist of Australia and New Zealand Banking Group.
Australian bonds were little changed, with the yield on the
10-year government benchmark one basis point lower
at 1.179%. The three-year bond yield was also little changed, at
Across the Tasman Sea, New Zealand bonds were a
little weaker, pushing yields one basis point higher across the
(Editing by Clarence Fernandez)