WELLINGTON/SYDNEY: The Australian and New Zealand dollars were nursing losses on Tuesday after the market's reception to Spain's bank bailout soured all too quickly, pulling down global equities and bond yields.
Australian economic news also breaks the recent strong run with NAB's survey of businesses showing a slide in conditions and confidence in May, largely due to external concerns .
Aussie off at $0.9890, having shed 1 percent overnight from a high of $1.0010, though dealers did report support at $0.9850.
New Zealand dollar settles around $0.7695/00 little changed from its New York close, but down 1 percent from late Monday's $0.7774.
Kiwi support initially at $0.7660 and below that solidly around $0.7620, the low on June 8, with $0.7750, Monday's inter-session high, the first hurdle higher.
Market doubts grow about Spain's bank rescue deal, which will lift its debt and possibly ranking ahead of regular government debt in the queue for repayment, adding to the country's high borrowing costs.
Greece's elections this weekend also cast a shadow over sentiment, with a win for parties opposing the austerity terms of the country's bailout raising risk that Greece might leave the euro.
Aussie and kiwi sit lower against the yen. Aussie at 78.25 yen from 79.53 on Monday, and the kiwi also to 60.96 yen from 61.91.
Data shows some sparks of life in New Zealand consumer activity, with house prices and sales perking up, while electronic card retail sales rise for a third consecutive month.
Neither set of numbers alters the outlook for the Reserve Bank of NZ's rate review on Thursday. Markets pricing in a 20 percent chance of a rate cut, but analysts overwhelmingly expect no change, with the next move seen as a rise in the first quarter of next year.
NZ government bonds rise, tracking Treasuries, with yields as much as 9.5 bps lower as investors seek safety.
Australian bond futures were higher along with Treasuries. The three-year contract up 0.040 points at 97.670, while the 10-year contract added 0.065 points to 97.055.
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