WELLINGTON/SYDNEY: The Australian and New Zealand dollars clawed back from four-month lows against the US dollar on Tuesday, but investors were wary of risk given the political uncertainty in the euro zone and the prospect of resistance to austerity measures.
* The Aussie trades at $1.0200, pulling back from $1.0110 hit on Monday, its weakest level of the year. The Australian currency rose after trading around $1.0140 late in local trade on Monday.
* The kiwi trades around $0.7950, from around $0.7925 late in the local session on Monday, and backing off the low of $0.7907 hit on Monday, its lowest since mid-January.
* The Aussie and kiwi track the euro, which recovered from a near-four-month low initially hit on concerns that French Socialist President-elect Francois Hollande may resist euro zone austerity measures spearheaded by his predecessor and Germany.
* The euro later got a lift from higher European shares on Monday as equity investors brushed off the immediate concerns about election outcomes in France and Greece.
* Resilient US share prices also supported the Aussie and kiwi, which are expected to consolidate after they held above key technical support levels.
* The pair bounce back from three-month lows against the yen, with the Aussie at 81.50 yen and kiwi at 63.54 yen and nearly their weakest of the year versus the euro .
* But the Antipodeans extend losses to hit their lowest in nearly six months against a broadly stronger sterling .
* Market participants are wary the euro and other high-risk currencies may suffer more when London markets reopen after a holiday on Monday and the world's largest currency trading centre reacts to the European election results.
* For now, the Aussie enjoys strong support around $1.0123, the 50 percent retracement of its October-February rally. Any correction higher expected to be capped around $1.0225-1.0250.
* Domestic issues weigh on the Aussie, which has fallen more than 2 percent versus the US dollar since the start of May, when the Reserve Bank of Australia cut interest rates by 50 basis points and appeared to leave the door open to lower rates.
* Kiwi near-term support seen around $0.7920, the 50 percent retracement of its November-February rally, due to local demand and profit-taking from its near 3 percent sell-off so far this month. The currency to trade around $0.7925-0.7995 on Tuesday.
* Against a trade weighted currency basket, the kiwi trades at 71.02, holding above a four-month trough of 70.90 hit late last week and treading above technical support at 70.93, its 200-day moving average.
* NZ government finances come in worse than forecast in the nine months to March 31 as the combined impact of weak tax take and earthquake related expenses weigh.
* Investors wait for the Australia's annual budget later on Tuesday. Prime Minister Julia Gillard's spending plan is expected to slash spending to deliver a surplus in 2012/13, although many economists question such a tight fiscal policy.
* The kiwi stays under selling pressure after a series of weak economic data last week has pared back market expectations that the Reserve Bank of New Zealand will raise interest rates from 2.5 percent before the end of the year.
* Australian government bonds hold near historic highs hit on Monday, when investors ploughed into triple-A rated Aussie debt on the view that it was a safe bet given political uncertainty in the euro zone.
* The three-year contract down 0.050 point at 97.270, after it rose as high as 97.330 on Monday, its highest since 1992, while the 10-year contract traded at 96.620, down 0.030 point but hovering hear an all-time high of 96.650.
* New Zealand government bond prices slip slightly, nudging yields up 2 basis points across the curve.