By Swati Pandey and Charlotte Greenfield
SYDNEY/WELLINGTON, April 20 (Reuters) - The Australian and New Zealand dollars hit multi-day lows on Friday and were poised to finish the week in the red as traders wagered interest rates in both countries will remain at record lows for a long time to come.
The Australian dollar AUD=D4 fell as deep as $0.7707, the lowest since April 10. It was last down 0.2 percent at $0.7712. The retreat came as the Aussie again tested the 200-day moving average at $0.7815 only to run into heavy speculative selling.
Its New Zealand cousin NZD=D4 capped its fourth down day at $0.7240, a level not seen since early April. The kiwi has already lost about 1.5 percent so far this week.
The Aussie has been on a downward trend since February, falling in 9 out of the past 12 weeks on a cocktail of negative factors including a tariff dispute between the United States and China.
A full-blown trade war could prove damaging for Australia's export-heavy economy.
This week, it was disappointing data on Australia's labour market that unsettled investors. Just 4,900 net new jobs were added in March, well short of forecasts for 21,000 while February was revised to show a 6,300 fall rather than the original 17,500 increase. the ditch, official figures on Thursday showed New Zealand's headline inflation slowed to just 1.1 percent in the first quarter, the bottom of the central bank's 1-3 percent target range. tepid number led many to wager that consumer prices in Australia due next week will be lukewarm too. Analysts forecast March quarter core inflation stuck at 1.8 percent, below the central bank's target band of 2-3 percent.
Traders say a weaker number could see the Aussie down to $0.7650 where critical support lies amid bets the Reserve Bank of Australia (RBA) would lag other major central banks in this tightening cycle.
The RBA is widely expected to hold interest rates at a record low 1.50 for another year after sitting on the fence for 20 months. The Reserve Bank of New Zealand is also likely to stay pat after leaving rates at all-time lows since late 2016.
The antipodeans' stable policy outlook contrasts with the U.S. Federal Reserve which is expected to raise rates at least two more times this year.
Moreover, the Bank of Canada has flagged more interest rate hikes this year while the Bank of England is also expected to move rates up, albeit slowly. Zealand government bonds 0#NZTSY= eased, sending yields 3 basis points higher at the long end of the curve.
Australian government bond futures fell, with the three-year bond contract YTTc1 down half a tick at 97.725. The 10-year contract YTCc1 slipped 3.5 ticks to 97.1700. (Editing by Shri Navaratnam)