The Australian and New Zealand dollars weakened on Tuesday on nerves over the rising economic cost of the coronavirus epidemic and a plunge in oil prices, though hopes for global policy support limited losses.
The Australian dollar <AUD=D4> was last down 0.4% at $0.6557, after going as deep as $0.6312 on Monday, a level not seen since early 2009.
The New Zealand dollar <NZD=D4> slipped 0.6% to $0.6297. It plunged to $0.6008 in the previous session amid a global markets rout.
"It's clear we are in a new, incredibly worrying phase in this crisis," said Chris Weston, Melbourne-based head of research at Pepperstone.
"While we are watching the coronavirus case count, the focus has switched lanes and we are watching funding channels and credit spreads – financial contagion is hitting risk for six and is breeding a new level of panic."
Increasing bets of aggressive monetary policy action from central banks around the world offered a measure of relief to global markets, with the U.S. Federal Reserve expected to slash interest rates again next week. The U.S. government was also expected to announce fiscal measures.
The Fed delivered an emergency rate cut only last week and on Monday stepped up the size of its fund injections into markets to head off stress.
Closer to home, the Reserve Bank of Australia (RBA) is widely expected to cut its cash rate again to an all-time low of 0.25% next month. The country's government will soon announce fiscal stimulus measures to boost economic growth.
Bond prices fell as investors mustered the courage to dip back into equities, lifting yields from record lows touched on Monday. Australian 3-year bond yields were last at 0.49% after going as low as 0.335% in the previous session. <AU3YT=RR>
In New Zealand, the number of coronavirus infections are few and contained but given the country's close trade ties with China, the hit to its economy is likely to be large.
The Reserve Bank of New Zealand(RBNZ) is prepared to deploy unconventional monetary policy, though such measures are not expected to be needed just yet, Governor Adrian Orr said in a speech.
(Editing by Devika Syamnath)
