WELLINGTON/SYDNEY: The Australian and New Zealand dollars got off to a wobbly start on Monday as investors reacted cautiously to reports that European leaders were discussing bolder measures to try and contain the euro zone debt crisis.
Aussie back at $0.9778, after a brief spike to $0.9865 from $0.9789 in late New York trade. It had fallen nearly 7 pct last week, hitting a 9-1/2 month low of $0.9669 in London on Friday.
Next support at the Sept. 23 low of $0.9669, then the 50 pct retracement of the year's low/high is at $0.9571, while resistance seen around $0.9867, then $0.9927.
NZ dollar softer around $0.7720, after initially climbing to $0.7830 early from $0.7752 in NY.
Kiwi fell almost 7 pct last week to a near six-month low of $0.7724 on Friday. Support initially at $0.7724 and below that $0.7706 with $0.7893 the first line of resistance.
The Antipodes holding ground on euro, after taking a severe hit last week, with the single currency at A$1.3737 , off a 6-week peak of A$1.3882. It also retreats on the kiwi to NZ$1.7353, after scaling a fresh one-month high of NZ$1.7468 earlier in the session.
Against the yen, kiwi near six-month trough, hovering at 59.10 yen , while the Aussie bounces to 74.69 yen , from a 13-month low of 73.60 last week.
Kiwi not helped by first monthly trade deficit in eight months in August as annual trade surplus narrowed on rising imports.
Aussie climbs to a two week-high of around NZ$1.2672 against kiwi before easing to NZ$1.2621, even as markets pricing implies a 44 pct chance of a rate cut next week, compared with a 10 pct risk in NZ.
No major data due in Australia.
NZ government bonds follow US treasuries lower, with local yields around 2 bps higher across the curve early. Two-year swap yields recovered to 3.06 pct from record low of 3.0 pct last week.
Australian bond futures lower on profit taking, with the three-year contract down 0.02 points at 96.550. The 10-year 0.015 points lower to 95.955.
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