By Swati Pandey and Charlotte Greenfield
SYDNEY/WELLINGTON, Sept 28 (Reuters) - The Australian dollar steadied near three-week highs on Wednesday as a pick-up in global risk sentiment delivered a third day of gains, while its New Zealand cousin still struggled near one-month lows.
The Australian dollar AUD=D4 held at $0.7671, swinging between gains and losses, after once again failing to breach 77 cents - a crucial chart resistance.
It added 0.4 percent on Tuesday, its biggest daily percentage gain in a week, as markets judged Democrat Hillary Clinton the winner of the first U.S. presidential debate with Republican Donald Trump. 77 cents level is still a bridge too far," said Greg McKenna, chief market analyst at brokerage AxiTrader.
The Aussie has breached that barrier several times in the past few months but fell back each time.
"But the persistence of the Aussie's strength speaks volumes about the underlying support it has in the current global environment, which is conducive to further gains," McKenna added.
After weakening in August, the Aussie is on track to end this month higher. When risk appetite rises, the Aussie is favoured as a carry currency with investors borrowing at low rates in yen or euros to buy higher yielding Australian assets.
It is also faring better against the New Zealand dollar AUDNZD=R and is set for its biggest monthly gain since March. The cross gained 0.3 percent on Wednesday.
The Aussie was steady against the euro EUDAUD=R and inched higher against the yen AUDJPY=R
Against the greenback, the New Zealand dollar NZD=D4 fell 0.2 percent to $0.7288 on Wednesday, after two straight gains that helped it off a one-month low of $0.7221 earlier this week.
New Zealand's relatively high yields are still supporting the currency, which has been on the rise since late May when it formed a trough around $0.6676.
"NZD/USD and NZD/AUD support is evident in price action, with both bouncing off lows nicely, maintaining the uptrend," said David Croy, senior rates strategist at ANZ.
New Zealand government bonds 0#NZTSY= gained, sending yields 5 basis points lower at the long end of the curve.
Australian government bond futures were higher too, with the three-year bond contract YTTc1 up 2 ticks at 98.46. The 10-year contract YTCc1 rose 2.5 ticks to 98.045. (Editing by Richard Borsuk)