WELLINGTON (Reuters) - The Australian dollar stumbled to an eight-month low against the euro as the single currency rallied on optimism that the euro zone was recovering from its debt crisis.
* The Aussie plumbed a three-week low of $1.0410 in offshore trade, as the currency was also stung by sluggish commodity prices and economic risks. Market liquidity is thin as Australian markets are closed for a national holiday on Monday.
* The euro charged up to around A$1.2930 in offshore trade according to Reuters data, its highest since May. Versus the New Zealand dollar, the single currency climbed to around NZ$1.6105, its highest in nearly a month.
* The euro rallied across the board, hitting an 11-month high of $1.3479 late last week after the European Central Bank said the region's banks would pay back more than expected in loans this week, signaling some stabilization of the region's financial system.
* Market participants said the single currency's push beyond $1.3400 had triggered additional gains against other currencies, including the yen and the Aussie.
* Aussie also weighed by a slide in commodities including copper and gold, which prompted investors to continue trimming hefty bets that the currency will gain more.
* Also keeping the Aussie under selling pressure is speculation that a struggling economy may raise the risk that the Reserve Bank of Australia may cut interest rates again in the coming months. Market see a roughly 35 percent chance of a rate cut next month.
* Kiwi slips to a one-week low of $0.8355. Some in the market say reports questioning the safety of New Zealand milk, the country's biggest export product, has weighed on the New Zealand currency, although the impact has been limited so far.
* Kiwi supported by solid economic data, including a lift in manufacturing and consumer confidence last week, which keeps the currency in range of a 15-month high of $0.8477 hit last month.
* Some see a risk of kiwi selling later this week if the Reserve Bank of New Zealand speaks out against currency strength when it makes a policy announcement on Thursday, although technical support seen at $0.8300.
* Both Antipodean currencies rally versus the yen, which falls broadly after it falls versus the broadly stronger euro.
* Aussie, kiwi climb to their highest since 2008, to around 95.05 yen and 76.35 yen, respectively, as yen also battered by speculation that massive Japanese fiscal stimulus will continue to weaken the Japanese currency.
* Aussie faces more selling pressure after it breaks below technical support at $1.0467, its 55-day moving average. Focus on whether it will hold around support at $1.0418, its 100-DMA, as a break below would open the dollar to a fall towards $1.0300.
* Kiwi hovers around technical support at $0.8360, its 21-DMA, while upside capped due to offers suspected on an approach to $0.8400.
* New Zealand government bonds slide, pushing yields 4 basis points higher across the curve as the domestic debt market tracks losses in U.S. Treasuries late last week.
(Australia and New Zealand bureaux)
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