By Cecile Lefort and Charlotte Greenfield
SYDNEY/WELLINGTON, Feb 24 (Reuters) - The Australian and New Zealand dollars took a breather on Friday against their U.S. counterpart after running into light profit-taking, while staying on track for solid weekly gains versus the euro.
The Australian dollar AUD=D4 eased to $0.7712, from a three-month peak of $0.7741 on Thursday. Since November, it has met a wall of resistance around $0.7707-$0.7778. Yet, it was poised to show a 0.4 percent weekly gain, partly due to broad U.S. dollar weakness.
The Antipodean currencies also outperformed a soggy euro, showing weekly gains of 0.8 percent. The euro stood at A$1.3719 EURAUD=R , having gone as deep as A$1.3619 on Wednesday, the lowest in three years.
The common currency is down 3.6 percent so far this month, and if sustained, it would be the largest drop in more than a year. The euro has been hit on fears about anti-European Union rhetoric from right-wing French presidential candidate Marine Le Pen. The two-round elections will be held in April and May.
The euro stood at NZ$1.4644 EURNZD=R and a break of NZ$1.4522 would be the lowest in two years.
Reserve Bank of Australia governor Philip Lowe said he would like a lower Australian dollar, but acknowledged it was also hard to say it was overvalued. ID:nS9N1CA048
Speaking at a semi-annual parliamentary economics committee, the central bank chief also said it was "reasonable" that the market was pricing in steady interest rates for this year.
Across the Tasman sea, the New Zealand dollar NZD=D4 edged lower to $0.7221, but within sight of a two-week peak of $0.7246 touched the previous day.
The currency was on track for a weekly gain of 0.65 percent after two weeks of losses, with New Zealand's strong economy and relatively high yields underpinning the currency.
"Our fair value model estimate still sits around the 0.74 mark, so there is scope for further upside without becoming stretched if the USD sees further selling pressure," said BNZ currency strategist Jason Wong.
Against its Kiwi cousin, the Australian dollar held at NZ$1.0666 AUDNZD=R , on track for a monthly gain of 2.8 percent. If sustained, it would be the biggest in more than a year.
New Zealand government bonds 0#NZTSY= gained, sending yields 4.5 basis points lower at the long end of the curve.
Australian government bond futures rallied, with the three-year bond contract YTTc1 up 4 ticks at 98.010. The 10-year contract YTCc1 gained 5.5 ticks to 97.2400 while the 20-year contract YXXc1 added 5.5 ticks to 96.3600. (Editing by Sunil Nair)