Aussie, New Zealand dollar soft on risk caution, Greece woes

WELLINGTON/SYDNEY: The Australian and New Zealand dollars started softer on Monday, with concerns about Greece's debt woes and weak equities weighing on risk trades.

The Aussie around $1.0461 vs $1.0485 in late New York trade on Friday as markets await Greece's parliament this week to approve austerity measures to secure bailout funds.

Aussie currently testing support band, with break of May 25 low around $1.0440 likely to pave the way for more losses. Against yen, Aussie at 84.16 yen , not far off the June 20 trough of 84.03. A break of which would take it back to late March levels.

Last week, Aussie bulls suffered a setback after RBA minutes revealed policymakers saw no urgent need to raise rates and a report showed China's factory growth nearly stalled in June, further evidence the nation's biggest trading partner is losing steam.

The NZ dollar tracking the Aussie lower to $0.8041, from $0.8105 in NY and a peak of $0.8174 in London. Kiwi seen consolidating between $0.8000 and $0.8200.

On the cross rate, the Aussie around NZ$1.3005 from NZ$1.2948, but still below Tuesday's three-month low of NZ$1.3167.

Focus still on Europe as Greece needs parliament's nod to get more bailout funds. If funds are not secured, Greece could default on its massive debt, which would roil global markets.

Worries about Greece caused the euro to drop to record low vs the Swiss franc on Friday and fall against the dollar for three straight sessions. Euro around 1.1825 Swiss francs and $1.4171 early in Asia.

Wall Street, gold and oil prices fell while copper rose and the CRB commodities index flat. Risk aversion also pushed US benchmark 10-year treasury yields down.

The diary looks pretty bare this week for Australia, while in New Zealand, data on Monday showed the country posted a smaller annual trade surplus in May.

NZ bond yields follow US Treasury lower, with local yields down around 2.5 bps.

Australian bond futures higher with the three-year up 0.06 points at 95.410 and the 10-year contract 0.06 points higher at 94.975.

COPYRIGHT REUTERS, 2011