The Australian and New Zealand dollars were set for the biggest monthly declines since the mid-1980s after concern the global economy will slip into recession prompted investors to dump higher-yielding assets.
The currencies plunged against the US dollar and yen last month as interest-rate cuts in the US,
Europe and Asia failed to halt a global stocks sell-off that wiped out more than US$10 trillion ($17 trillion) of market value.
"Even though we have seen central banks around the world cut interest rates, that's not going to be enough to prevent a global recession," said Danica Hampton, a currency strategist at BNZ in Wellington.
"We will continue to see risk aversion and repatriation-type flows support the yen and the US dollar. The trend for both the aussie and kiwi will be lower in coming months."
The New Zealand dollar slumped about 13 per cent to US58.80c, the biggest drop since 1984. It also tumbled against the yen to 57.80.
The Australian dollar dropped about 15 per cent last month to US67.34c from US79.25c at the start of October. It also plunged 21 per cent against the yen to 66.29. The declines were the most since the aussie was traded freely in December 1983.
The currencies declined for the first time in four days yesterday after a report showed that the US economy contracted in the third quarter by the most since 2001.
Concerns that the global economy will slump dragged commodities prices lower, weighing on the Australian and New Zealand dollars.
The Reuters/Jefferies CRB Index of 19 raw materials has plunged 23 per cent since September 30, poised for the biggest monthly drop since it was introduced in 1956.
Raw materials account for 60 per cent of Australia's exports, while commodities make up 70 per cent of New Zealand's exports.
The Reserve Bank of Australia bought its own currency in the market for three days from October 24 as it traded near a five-year low against the US dollar. The bank intervened to "provide liquidity rather than defend any particular level," Assistant Governor Guy Debelle said.
-BLOOMBERG
