By Swati Pandey
SYDNEY, April 24 (Reuters) - The Australian and New Zealand dollars lost ground on the euro on Monday but fared better elsewhere as investors unwound hedges following a keenly-watched French election in which centrist Emmanuel Macron swayed to victory in the first round.
Macron's win reduces the prospect of an anti-establishment shock on the scale of Britain's vote last June to quit the European Union and the election of Donald Trump as U.S. president.
Markets had feared the success of far-right anti-establishment leader Marine Le Pen. a relief rally, the euro EURAUD=R jumped to its highest since early January against the Australian dollar. The euro is already up 1.6 percent so far in April, its best monthly show since a 3.5 percent gain last May.
On the New Zealand dollar EURNZD=R , the euro surged to a six-month peak.
"Risk is on this morning because traders are cheering what they expect to be a victory for the EU project as Macron ascends to the Elysee Palace after the second round of the election process on May 7," Greg McKenna, chief market strategist at AxiTrader.
"All of that is good news for the Australian dollar."
Elsewhere, the Aussie initially rose to a one-week high of $0.7600 on the greenback AUD=D4 but gave up some of the early gains to hold at $0.7556.
On the yen, the Aussie AUDJPY=R climbed to a 3-week peak as the safe haven currency was broadly dumped in favour of high-yielding assets.
Locally, the next big event is Australia's first-quarter inflation due on Wednesday.
Headline consumer price inflation is expected to accelerate to 2.2 percent, mostly on temporary factors, with underlying inflation remaining subdued at 1.8 percent. ECONAU
Tepid consumer prices is one of the key concerns of the Reserve Bank of Australia (RBA), which has left interest rates at a record low 1.50 percent after last easing in August 2016.
The New Zealand dollar NZD=D4 was largely unchanged at $0.7031 but hit its highest in three weeks on the yen NZDJPY=R .
As a risk-on mood dominated, New Zealand government bonds 0#NZTSY= eased sending yields about 5 basis points higher across the curve.
Australian government bond futures slipped, too, with the three-year bond contract YTTc1 down 2 ticks at 98.160. The 10-year contract YTCc1 fell 5 ticks to 97.385. (Editing by Kim Coghill)