The Australian dollar hovered near multi-month lows against its US counterpart and euro on Friday as iron ore prices extended losses, putting it on track for a hefty weekly drop. The Australian dollar slipped to a four-month trough of $0.7378, from $0.7410 early, having fallen 1.3 percent since Monday in a third consecutive week of losses. Tumbling prices for iron ore, Australia's biggest export earner, gave investors an excuse to cut long Aussie positions.

The most-traded contract on the Dalian Commodity Exchange dropped 7 percent and that was on top of a 5 percent decrease on Thursday. The Aussie also hit six-month lows against a euro that has been re-energised by expectations that centrist candidate Emmanuel Macron will win Sunday's presidential election in France. The common currency powered up to A$1.4875 to show a gain of 2 percent this week. It has bounced 10 cents since February.

Likewise, the euro leapt to a two-year peak of NZ$1.5989 against the New Zealand dollar before slipping back to NZ$1.5955. It is up around 5 percent so far this year. The Antipodean currencies struggled against the pound which jumped to its highest since September at A$1.7484 and near two-year peaks at NZ$1.8757. But the New Zealand dollar was on a firm footing for a fifth session against its Aussie cousin which dropped to NZ$1.0727, well off Monday's peak of NZ$1.0935.

The New Zealand dollar fell to an 11-month low of $0.6840 overnight before recovering slightly to $0.6882. New Zealand government bonds eased, sending yields 0.5 basis points higher at the long end of the curve. Australian government bond futures fell to one-month lows, with the three-year bond contract off 3 ticks at 98.060. The 10-year contract eased 3.5 ticks to 97.2900, while the 20-year contract lost 2.5 ticks to 96.7200.

Copyright Reuters, 2017