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imageSYDNEY/WELLINGTON: The Australian and New Zealand dollars clawed their way off lows on Tuesday but still seemed destined to suffer losses exceeding 6 percent for the month amid a strengthening US currency and sliding global commodity prices. The Australian dollar struggled up to $0.8727, having slipped as far as $0.8684 overnight, its lowest since January. It has tumbled 6.5 percent this month, the largest loss since May last year.

While some dealers see a risk of a correction, Ray Attrill, global co-head of FX strategy at National Australia Bank, does not forecast any meaningful rally. "I don't see a spike above 90 cents in the short-term and I think we will test 85 cents at some point during Q4," he said. He reviewed his Aussie forecast on Monday, keeping it at 88 cents by the end of the year.

Major support was found at the 2014 trough of $0.8660 and a break would take it to its weakest level in more than four years.

The Antipodean currencies have come under pressure in recent weeks due to a rising US dollar as investors see a greater risk the US Federal Reserve will start hiking rates, albeit not for some time, in contrast to loose policies in the euro zone and Japan.

Undermining the Aussie and kiwi dollars was a sharp decline in commodity prices combined with concerns about the health of China's economy, a key export market for both Australia and New Zealand. Spreading pro-democracy protests in Hong Kong only added to worries with investors wary about China's response. The Aussie is often used as a liquid proxy for Asian bets.

14-MONTH LOW

It was much of the same story for the New Zealand dollar which took a pasting on Monday after data confirmed the Reserve Bank of New Zealand had intervened during August to weaken the currency.

The kiwi was licking its wounds at $0.7766 on Tuesday, having hit $0.7708, the lowest in 14 months.

It has fallen more than 7 percent this month and is down 12 percent from a three-year high of $0.8839 touched in mid-July. Still, the scale of the rout has left the kiwi oversold on technical indicators.

"There are good reasons for the sharp move lower to be modestly retraced in the near-term, with the potential to take a look back at $0.80," BNZ currency strategist Raiko Shareef said in a note. The kiwi is expected to find chart support at the latest low around $0.7710 and more substantial support at the 2013 trough of $0.7680, while resistance was put at $0.7810.

However, the Reserve Bank of New Zealand's readiness to act on its words, as it did in August, should keep investors vigilant in case the central bank seizes any opportunity to intervene.

"The selling in August could well mark the beginning of that campaign, and we would not blink should the next RBNZ update show a similar scale of selling in September," said Shareef.

The kiwi was still looking soggy against all the majors.

The Aussie dollar was holding the previous day's gains at NZ$1.1225 , while the kiwi was about 0.2 percent down against both the yen and the euro.

There was no support from local data as home building consents were unchanged in August, while a survey showed business confidence falling to a two-year low.

New Zealand government bonds were trading a touch softer, sending yields half a tick higher along the curve.

Australian government bond futures rose, with the three-year bond contract up 2 ticks to 97.250. The 10-year contract added 3 ticks to 96.500.

Copyright Reuters, 2014