SYDNEY, March 22 (Reuters) - The Australian and New Zealand dollars weakened against the greenback on Monday as a plunge in the Turkish lira bit into investor appetite for risk as a week of losses for oil and iron ore also hit the commodities-sensitive currencies.
The Aussie was down 0.46% at a four-session low of $0.7708 during midday trading, extending its losses for a third-consecutive day. The risk-sensitive currency has support in the $0.7680/70 zone.
The New Zealand dollar dropped 0.32% to $0.7145, but had already recovered from an intraday low of $0.7136, the lowest since March 10. The kiwi dollar has support at $0.7120 that it would have to breach before testing its March trough at $0.7100.
Worries that a crumbling Turkish lira will cause disruption in other financial markets saw investors move to the safety of the U.S. dollar and the yen.
“Price action is likely to remain choppy today,” analysts at the Australia and New Zealand Banking Group said in a note.
For the Australian dollar, the direction of U.S. Treasuries, which last week rose to 14-month highs, supporting the greenback while hitting bonds in Australia and New Zealand, will continue to be a key factor to watch.
“Rising long yields are likely to be an ongoing challenge for Australian dollar as global equities balance an improving earnings outlook with potential portfolio shifts to bonds,” Westpac Banking Corp strategists said.
“And with crude (oil) prices leading commodities lower, and iron ore following quickly behind, the risks of further weakness for the A$ are clear to see.”
Yields on Australian 10-year paper eased to 1.76%, down from 1.80% at the end of last week. That left the spread over Treasuries at 8 basis points, a long way from the 39 basis points seen at one stage of the mass sell-off in February.
New Zealand government bonds also rose, sending yields about 4-7 basis points lower at the long-end of the curve.
(Reporting by Paulina Duran; Editing by Kenneth Maxwell)