SYDNEY/WELLINGTON: The Australian and New Zealand dollars rose to multi-month highs against the euro on Tuesday as fears that Cyprus' bailout scheme could be used elsewhere haunted the euro zone banking sector.
Euro fell as far as A$1.2272, lowest since mid-Nov 2012, a vicious reversal from a $1.2492 high early on Monday. It has fallen about 7.4 pct since February, weighed by Cyprus woes.
The single currency fares even worse vs the kiwi , holding near a seven-month low at NZ$1.5377 after skidding 1.6 pct to NZ$1.5364, worst since mid-Aug last year.
Euro wobbly after Dutch finance minister Jeroen Dijsselbloem, who heads the Eurogroup, said the program agreed for Cyprus represents a new template for resolving euro zone banking problems and other countries may have to restructure their banking sectors.
He later appeared to backtrack from his comments, saying Cyprus was a specific case with exceptional challenges, helping the euro pare some losses.
That also put pressure on Wall Street and capped the Antipodeans against the greenback. Aussie around $1.0462 early, off overnight low of $1.0444.
Resistance still expected around $1.0475, the Jan 30. high, then $1.0550. Key support seen around $1.0410, a 100-DMA and also 61.8 pct retracement level.
NZ dollar holds in tight range, last around $0.8356, not far off $0.8362 in late local session on Monday. Kiwi seen ranging between $0.8308, a 100-DMA, and $0.8392, a 61.8 pct retracement level.
NZ expects trade data on Tuesday, while the head of the Reserve Bank of Australia is due to speak in Sydney .
Focus also on Fonterra's interim results on Wednesday. The dairy giant may update its payout forecast, which could increase given the recent surge in dairy prices. It may also update on the impact of the drought on production.
Australian government bonds higher, with the three-year contract indicated 0.050 points up at 96.970, while the 10-year contract gained 0.075 points at 96.430.
NZ government bonds firmer in early trade, yields down as much as five basis points at the long end.
<Center><b><i>Copyright Reuters, 2013</b></i><br></center>
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