The Australian and New Zealand dollars lost ground on Tuesday as dire data at home underlined the economic toll of fighting the coronavirus, while a flare-up in concerns about North Korea hurt risk sentiment across Asia.
The Aussie slipped 0.6% to $0.6295 <AUD=D3> and away from a $0.6398 top on Monday. It now has support at $0.6264, with major resistance around last week's peak at $0.6445.
The kiwi dollar lost 0.9% to $0.5980 <NZD=D3>, leaving behind a top at $0.6060 and threatening support at $0.5924.
Part of the pullback came when markets were spooked by reports North Korean leader Kim Jong Un was ill after undergoing a cardiovascular procedure early this month.
South Korea's Yonhap news agency later cited a government official saying Kim was not seriously ill.
The risk of political instability in the rogue nation sent the South Korean won sliding and lifted the U.S. dollar, while unsettling stocks across the region.
In Australia, the damage done by the coronavirus lockdown was all too clear as the Bureau of Statistics reported that 6% of all jobs in the country were lost in a brief period between March 14 and April 4.
That would equate to a huge 780,000 jobs out of a workforce of 13 million.
"Rising unemployment will hit consumer spending, home prices and wages growth," said Diana Mousina, a senior economist at AMP Capital. "Inflation will also be lower than expected. We expect underlying inflation to be around 1% by the end of the year."
"At least policy makers are willing to do whatever is necessary to keep the economy from spiralling into depression."
The Reserve Bank of Australia (RBA) has already cut rates to 0.25% and targeted a similar level for three-year bond yields by buying government debt in the market.
Minutes of the bank's April meeting on Tuesday showed it feared economic output would shrink markedly this quarter and remain subdued through the third quarter as well.
RBA Governor Philip Lowe is due to speak on the economic outlook and answer questions later on Tuesday.
The bond market is keen to hear more detail on the bank's bond buying intentions given it has scaled back purchases sharply in the last couple of weeks, even as the government has massively ramped up its borrowing.
On Tuesday, three-year bond futures <YTTc1> were a fraction lower at 99.735, implying an yield of 0.265%, while the 10-year contract <YTCc1> eased 1.5 ticks to 99.1550.
(Editing by Lincoln Feast.)
