WELLINGTON/SYDNEY: The Australian and New Zealand dollars held near three-week highs against their US counterpart on Monday and scaled seven-month peaks versus the yen with investors focusing on a euro zone finance ministers meeting later in the day.
The Aussie marked time at $1.0460, having rallied more than 1 percent last week. It was a whisker away from a two-month high of $1.0480 hit in November, and a break above would see it aim for the September peak of $1.0625.
Market sentiment sharply improved on Friday on hopes Greece will finally secure more emergency loans to keep it afloat.
Euro zone finance ministers meet on Monday for a third time in as many weeks to hammer out a deal for cash-strapped Greece before its debt repayments come due mid-December.
"The risk is if Europe doesn't (give aid to Greece), the disappointment factor is going to be high," said a trader at a foreign bank in Sydney.
Should euro zone officials hammer out a deal for Athens, as it is widely expected, he said the Aussie would be well supported, but wouldn't hit the roof either.
"A lot of positive sentiment has already been priced in," he said.
Dealers cited sell orders from $1.0475-90 to $1.0550, with support found at $1.0425.
Key data for Australia this week is Q3 business investments due Thursday. Forecasts are for a 2 percent gain, following a solid rise of 3.4 percent the previous quarter, but a weak report could raise the chances of an interest rate cut.
Markets put around 50-50 chance of a 25 basis-point cut by the Reserve Bank of Australia to 3 percent when it meets next week.
The New Zealand dollar consolidated recent hefty gains at $0.8240, having risen about 2.3 percent since hitting a 2-1/2 month low on Nov. 16.
"A Greek bailout deal may carry the kiwi a little higher, but we expect sellers will be encountered...into the $0.8290-$0.8310 window," said Bank of New Zealand strategist Mike Jones.
"We suspect this week will bring more kiwi sideways consolidation in the $0.8115-$0.8310 range," he added.
Investors were now awaiting the Reserve Bank of NZ's survey of inflation expectations due out on Tuesday, with a particular focus on the two-year read.
RUN AWAY YEN
Investors continued to make short shrift of the yen on expectations of bolder stimulus to spur Japan's economy, sending the Antipodean currencies to fresh seven-month highs.
The Aussie powered up to 86.42 yen, and last change hands at 86.00. It has made a lofty 4.3 percent gain so far this month and could take a crack at this year's peak of 88.62 set in March.
Likewise, the kiwi climbed to 68.08 yen, showing a 3.6 percent increase in November. It last fetched 67.76, with key resistance found at 69.11, the 2012 peak.
New Zealand government bonds traded with a slight bid tone, sending yields a touch lower in the front end.
Improved risk sentiment sent Australian government bond futures reeling with the three-year contract skidding to its lowest in more than two months at 97.240. It last traded at 97.270, flat on the day.
The 10-year contract plumbed one-month lows around 96.765, before recovering to 96.805, up 0.025 points.
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