{
  "id": 12805989,
  "title": "Australia, NZ dollars on defensive as spreads shrink",
  "url": "https://urgent.news/2026/10/08/australia-nz-dollars-on-defensive-as-spreads-shrink",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-10-08T06:25:37.000Z",
  "source": {
    "name": "Business Recorder",
    "slug": "business-recorder",
    "url": "https://www.brecorder.com/news/40443255/australia-nz-dollars-on-defensive-as-spreads-shrink"
  },
  "original_language": "en",
  "account": "On Thursday, the Australian and New Zealand dollars found themselves under defensive pressure as European debt markets instilled more confidence in the US dollar. The widening spread between French and German 10-year bond yields, the largest since 2012, added to the woes of local bonds. The strain was felt across Italian and Greek bonds as well, dragging the euro to a 22-month low against the Australian dollar, currently trading at A$1.6039. This downward trend also weighed on risk sentiment, propelling the US dollar higher. The Australian dollar is now hovering between $0.6990 and $0.7004, with support at the recent 13-week low of $0.6904. The New Zealand dollar, meanwhile, is at $0.5605, having slumped 0.4% overnight. A break below the 10-month low of $0.5581 could trigger a further decline towards at least $0.5485.\n\nAn FX analyst at CBA, Carol Kong, anticipates the shrinking spread will push the Australian dollar to $0.6600 by early next year. She attributes this to less positive and eventually negative interest rate differentials, partly due to the expectation of a Reserve Bank of Australia cash rate cut in 2027. However, current market expectations still include at least one more RBA hike by mid-next year, with no signs of cuts in 2027. Kong warns that a sharp equity market correction, a significant rise in bond yields, or an escalation of geopolitical conflict that dampens global growth prospects could quickly undermine risk appetite and propel AUD/USD lower.",
  "summary": "SYDNEY: The Australian and New Zealand dollars were back on the defensive on Thursday as jitters in European debt markets benefited the super-liquid greenback most, while adding to pressure on local bonds. Concerns about French deficits widened the spread between French and German 10-year bond yields to the largest since 2012, with the strain spreading to Italian and Greek bonds overnight. The…",
  "key_points": [
    "Australian and NZ dollars under defensive pressure",
    "Euro at 22-month low against AUD",
    "AUD may reach $0.6600 by early next year"
  ],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}