SYDNEY, May 12 Reuters The Australian and New Zealand dollars pared recent gains on Wednesday as a selloff in global shares dragged on risk currencies, while Aussie bonds underperformed as government borrowing plans disappointed bulls.
The Aussie faded to 0.7817 and away from a 10week top of 0.7891 hit early in the week. A sustained break of chart support around 0.7820 could see a test of 0.7790, and risk a relapse toward 0.7700.
The kiwi dollar eased to 0.7248, having also failed to sustain a 10week high at 0.7304. The loss of 0.724050 could see it back to 0.7210.
The Aussie was undermined in part by news Chinas Dalian Commodity Exchange was proposing to reduce the standard iron content requirement in its flagship futures, seeking to broaden supply sources and stem a recordsetting rally.
Australia is a major producer of high quality iron ore, which is also the countrys biggest export earner, so such a shift could temper prices and export receipts.
The strength of iron ore prices has been a windfall for miners profits and taxes, helping the Australian government deliver a lower budget deficit than first feared.
Yet the 202122 budget released on Tuesday also included more spending than expected, which should support economic growth but also lifted its borrowing needs.
As a result, the government announced it would issue a total of A210 billion 164.35 billion of bonds in the current year to end June, and A80 billion in 202122.
That was above what most analysts had…