Case $1)$ Suppose, $A$ is knight and $B$ can be either knight or knave
So, $A$'s statement "We are both knaves" is true which means $A$ must be knave which is contradicting our assumption. So, It is not a possibility that $A$ is knight.
Case $2)$ $A$ is knave and $B$ is knight
Now, $A$'s statement "We are both knaves" is false which means atleast one should be knight which is not contradicting our assumption that $A$ is knave and $B$ is knight. So, It is a possible case.
Case $3)$ $A$ is knave and $B$ is knave
Now, $A$'s statement "We are both knaves" is false which means atleast one should be knight which is contradicting our assumption. So, It is not a possible case.
So, Answer is $A$ is knave and $B$ is knight.