SYDNEY: The Australian and New Zealand dollars were slightly higher on Tuesday, as risk appetite in Asia recovered after Wall Street pared losses sparked by a hedge fund default that hit investment banks.

The New Zealand dollar was 0.14% higher at $0.7011 as investors also positioned for month-end, strategists said.

The kiwi is on track to shed 3.07% in March, which would be its worst monthly performance and its first quarterly loss in a year.

Investors fretting about the potential fallout from the collapse of Archegos Capital had earlier sought the safe haven greenback, although those jitters eased as the Asian trading day got underway.

The Australian dollar was slightly higher at $0.7643, on track to close the month - which has been riddled with volatility in bonds, oil and commodity prices - 0.92% lower.

Australian government bond yields were 8 basis points higher at 1.77% on Tuesday, mirroring a spike in Treasury yields overnight that was driven by inflation concerns. The Australian 10-year futures contract was 8 ticks lower to 98.19, implying a yield of 1.81%.

New Zealand government bonds were also lower with yields 7-8 basis points higher at the longer end of the curve.

The commodity-sensitive currency largely shrugged off falls in iron ore and oil on Tuesday, as shipping traffic resumed through the Suez Canal and attention switched to an OPEC+ meeting this week where the extension of supply curbs may be on the table. The Aussie, which the Commonwealth Bank says “is undervalued relative to commodity prices,” is well supported at the $0.7600 level and faces resistance at $0.7660.