SYDNEY, March 25 (Reuters) - The Australian and New Zealand dollars were trying to steady on Thursday as upbeat data on global factory activity helped put a floor under commodity prices, though the technical background looked bleak after breaks of multiple support levels.
The Aussie was holding on at $0.7594 and in a precarious position having shattered chart support at $0.7620.
It was now a whisker away from the February trough of $0.7564, and a break would risk a reversal to $0.7491 or even the 200-day moving average at $0.7367.
The kiwi dollar huddled at $0.6975, having shed a steep 2.7% for the week so far. Many long positions were stopped out by the break under $0.7100, which quickly took it through another layer of support at $0.7000.
The next bulwark is the 200-day moving average at $0.6866.
The currency has been in free fall since New Zealand announced measures to cool its red-hot housing market, which was seen as a potential drag on the economy and lessening pressure for an early hike in interest rates.
“The downward correction continues, with a possible end target being $0.6800,” said Imre Speizer, head of NZ strategy at Westpac.
“Implications for the NZ economy from the announced housing curbs are likely to be negative, taking the shine off the NZ economic outperformance story.”
However, he remained bullish on the kiwi longer term given signs the world economy was recovering strongly, which should support commodity prices.
A rebound in oil prices also helped after a ship ran aground in the Suez Canal and blocked the vital waterway.
The housing plan triggered a huge rally in debt markets where investors have sharply scaled back wagers on a rate hike next year.
Yields on two-year bonds have dived 14 basis points so far this week to stand at 0.22%, a long way from a 0.50% top hit briefly in February.
Ten-year bond yields have shed almost 28 basis points this week, the biggest drop since March last year.
Dealers noted the NZ government had also trimmed its planned issuance for April by around NZ$150 million a week, and the sale of a new 2032 bond was pushed out by a month to May.
Yields on Australian 10-year bonds were down 12 basis points this week at 1.689%, shrinking the spread over Treasuries to 7.5 basis points from as much as 39 basis points last month.
(Editing by Ana Nicolaci da Costa)
Source: Reuters