WELLINGTON/SYDNEY: The Australian and New Zealand dollars hit four-month lows against the greenback on Monday, tracking a broadly weak euro after elections in France and Greece raised speculation of political obstacles in passing future euro zone austerity measures.
* Aussie falls to $1.0151, retreating from $1.0256 in late local trade on Friday to hit its weakest since Jan. 9. The New Zealand dollar slides to $0.7924 from around $0.8000 late on Friday, reaching its lowest since Jan. 17.
* The Aussie and the kiwi extend losses after sliding on Friday, when a weak US jobs report spurred the view that the country's economic recovery is losing pace, prompting selling in high-beta currencies for the safe-haven US dollar.
* The Antipodean currencies take their cue from losses in the euro, which slides roughly 0.5 percent versus the US dollar after the election of Socialist Francois Hollande as France's new president suggested the new government may resist drastic austerity measures in the euro zone.
* Greek election results on Sunday also suggest a backlash to severe economic hardship faced by the population in return for an EU/IMF bailout, which has so far prevented the country from defaulting on its debts.
* "We expect the NZD moves to be fraught with downside dangers as the European political picture steers away from the possibility of austerity implementation," ANZ analysts say in a note.
* Market participants expect the Aussie and kiwi could suffer more if the euro extends losses. Next downward target for Aussie seen at $1.0146, and a break of this level would open up a slide to $1.0100.
* The kiwi falls to 70.91 against a currency basket. It pokes below technical support at 70.94, its 200-day moving average, and a daily close below that level will be a bearish signal.
* Against the dollar, market participants see scope for the kiwi to fall to $0.7900 in the immediate term, and that it will trade in a $0.7800-0.8000 range in the near- to mid-term.
* Aussie slides to a three-month low around 81.00 yen, while the kiwi falls as low as around 63.20 yen, also its weakest since early February.
* Despite their broad losses, the Aussie and the kiwi edge up against the broadly weak euro , which slips 0.2 percent from late Friday levels versus its Australian and New Zealand counterparts.
* Aussie, kiwi also suffer from domestic issues, with the Aussie dragged lower after the Reserve Bank of Australia cut its economic growth and inflation outlook late last week.
* Friday's report raised speculation that the Australian central bank may cut interest rates further after its surprisingly large 50 basis point cut to 3.75 percent last week.
* Immediate focus for the Aussie is retail sales data due at 0130 GMT, followed by the Australian government's budget on Tuesday, when it is due to unveil the full extent of its widely publicised drastic spending cuts.
* Kiwi pressured in the aftermath of weak New Zealand employment figures, sluggish data on trade and falling milk and commodity prices last week.
* Signs of slowing economic growth tarnish some of the currency's appeal as it suggests the Reserve Bank of New Zealand may hold off from raising interest rates until next year. Many in the market were expecting a 25 basis point rise from a record low 2.5 percent later this year.
* Last week's data also raises speculation of the possibility of a rate cut in New Zealand.
* More rate cuts in Australia would further narrow the Aussie's rate advantage against the dollar and other major currencies. Still, Australian and New Zealand rates are widely expected to remain among the highest of developed nations.
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