SYDNEY: The Australian and New Zealand dollars were struggling to find their footing on Wednesday as the fallout from war in the Middle East roiled markets globally, while solid domestic data offered just a sliver of support. The Aussie was off 0.3% at $0.7010, after a wild session overnight saw it dive as deep as $0.69445 before paring losses. Major support lies at $0.6897, with resistance up around $0.7135. Dealers reported speculation some investors had cut profitable long positions in the Aussie to raise funds to cover losses on leveraged trades elsewhere. The kiwi dollar was pinned at $0.5878, after shedding 0.9% overnight to sink as low as $0.5837. The bearish turn risks a retreat to $0.5712, while resistance stands at $0.5929 and $0.6012. “The Aussie’s relative strength had reflected Australia’s position as a net energy exporter,” said Kristina Clifton, a currency strategist at CBA. “However, we judge that the Aussie and kiwi are at risk of a sharp fall if the conflict drags on and markets downgrade the outlook for the global economy,” she added. “The Aussie can fall below $0.6800, the kiwi under $0.5700.” The ructions in markets overshadowed data showing the Australian economy grew a robust 0.8% in the December quarter, lifting annual growth to the highest since early 2023 at 2.6%. The Reserve Bank of Australia has argued that growth above 2.0% is inflationary, one reason it hiked interest rates to 3.85% in February. RBA Governor Michele Bullock on Tuesday warned another rate rise was possible this month given the policy board was worried that inflation expectations could become unanchored. Yet, analysts noted consumer demand had faded somewhat during the fourth quarter, while labour costs eased and market sector productivity improved. And all this was before the hike in borrowing costs and the recent surge in energy prices. Markets imply around a 30% risk of a March rate rise, while a quarter-point hike to 4.10% remains fully priced for May. Australian three-year bond yields dipped 4 basis points to 4.30% after the GDP data, having earlier hit highs not seen since late 2023 at 4.389%. Spreads over Treasuries remained wide at 80 basis points, having reached levels last seen in mid-2016.