Australian and New Zealand government bonds took a pasting on Monday even as their currencies found a steadier footing, with debt markets racked by withdrawal symptoms even though the Federal Reserve hasn't begun to slow its stimulus yet. The Aussie rose 0.7 percent to 90.72 yen, while the kiwi added 0.5 percent to 76.24 yen. The move appeared to confirm a base has formed for now, following a hefty selloff starting in May that saw the Aussie and kiwi fall as far as 88.90 and 74.41 respectively.
Against the dollar, the Aussie was little changed at $0.9218, holding above a 33-month trough of $0.9163 set last week. The kiwi bought $0.7746, also off a one-year low of $0.7700. The kiwi has fallen roughly 11 percent from $0.8676 in April and many in the market anticipate more losses as the Fed begins to take its foot off the quantitative easing pedal, which has prompted selling in commodity-linked and emerging currencies.