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Tuesday 19

March, 201911:03 AM



Aussie dumped for yen, but bonds in demand

Aussie dumped for yen, but bonds in demand

The Aussie was heading for a big weekly loss on the safe haven yen as the risk of a partial shutdown of the US government piled on pressure.

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By AAP 21.12.2018 01:28 PM

The Australian dollar was heading for a steep weekly loss on the safe haven yen as the risk of a partial shutdown of the US government piled pressure on already shaky equity markets.

But it fared a little better on the US dollar, which had troubles of its own from political uncertainty to sharply lower Treasury yields.

The yen and Swiss franc were the big gainers as US President Donald Trump refused to sign a bill funding the government, setting up a last minute showdown with Democrats in the senate.

That left the Aussie pinned at 79.21 yen, having shed one per cent overnight.

It was down almost 2.7 per cent for the week, the worst performance since April 2016.

The threat of a US government shutdown over Christmas came as investors were already fretting that the economy would not be able to withstand further rate rises from the Federal Reserve.

That uncertainty helped the Aussie steady for the moment on the US dollar at 71.14 US cents, though it was still 0.8 per cent lower on the week.

Australian bonds had a barnstormer of a week, with 10-year cash yields reaching their lowest since mid-2017 at 2.378 per cent.

The 10-year bond future was up 9 ticks for the week at 97.6250, while the three-year contract added 14 ticks to 98.150.

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