By Cecile Lefort and Rebecca Howard
SYDNEY/WELLINGTON, May 10 (Reuters) - The Australian and New Zealand dollars fell to multi-week lows on Tuesday, after sliding oil and metal prices combined with worries about economic strength in China sapped appetite for the commodity-linked currencies.
The Australian dollar AUD=D4 stood at $0.7331, from a low of $0.7300 hit earlier in the day, a level not seen since early March. Strong support was found around $0.7260.
It has tumbled 5 cents in three weeks, largely after the Reserve Bank of Australia cut rates last week for the first time in a year.
Markets 0#YIB: are fully priced for another easing to a record low of 1.5 percent late this year and imply a small chance of a follow-up move by December.
Also undermining the Aussie was a five-day fall in prices of iron ore, Australia's top export earner.
"There's a growing preference to be short risk currencies in this environment, particularly the Aussie dollar given its susceptibility to deteriorating hard commodity prices," said Stephen Innes, senior trader at FX and CFD firm OANDA Australia and Asia Pacific.
The euro briefly touched three-month highs versus the Aussie and New Zealand dollars EURAUD=R EURNZD=R .
Against the U.S. dollar, the New Zealand dollar NZD=D4 slipped to a six-week trough of $0.6733, having shed nearly 1 percent on Monday.
Commodity currencies were under pressure as a combination of technical factors and a reaction to weak China trade data over the weekend appeared to drive the latest currency moves, said BNZ Currency Strategist Jason Wong.
Investors will now be watching for the Reserve Bank of New Zealand's Financial Stability Report, due early Wednesday.
ANZ Bank Senior FX Strategist Sam Tuck expects housing to feature heavily in the report. "Evidence is mounting that the Auckland market is coming back on the boil and the RBNZ will certainly view that as a financial stability risk," said Tuck.
He noted, however, the key is whether it will do anything about it.
New Zealand government bonds 0#NZTSY= rose, sending yields around 3 basis points lower across the curve.
The ten-year cash bond NZ10YT=RR dived to an all-time low of 2.6 percent.
Australian government bond futures extended gains, with the three-year bond contract YTTc1 steady at 98.450, having scaled a fresh record of 98.490. The 10-year contract YTCc1 rose 3 ticks to 97.7150, while the 20-year contract YXXc1 was unchanged at 97.0900.
The two-year cash bond AU2YT=RR dived to an all-time low of 1.5 percent, from 2.1 percent late last month. (Editing by Shri Navaratnam)