By Cecile Lefort and Rebecca Howard
SYDNEY/WELLINGTON, Dec 21 (Reuters) - The Australian and New Zealand dollars struggled for momentum on Monday as traders were reluctant to make any significant moves in a holiday-heavy week.
The Australian dollar AUD=D4 held at $0.7155, having met a wall of sellers ahead of 72 U.S. cents. It touched a one-month trough of $0.7097 last week and was down 12 percent for the year.
It held its ground against a battered Canadian dollar at C$0.9990 AUDCAD=R , having briefly popped above parity on Friday. Tumbling oil prices have taken a toll on the loonie, down around 5 percent this year.
Underpinning the Aussie was a reduction in U.S. dollar bullish bets. Contracts in Australian dollar net short positions fell to around 72,000 in the week ended Dec 15, from 81,000, data from the Commodity Futures Trading Commission showed. Speculators also added to their net Aussie long positions.
The market reversed course on the kiwi dollar to be net long, from net short. urn:newsml:reuters.com:*:nL1N12G20Y
Some dealers suspect the corrections will be short-lived.
"It's unlikely traders will re-engage this week and will likely err to paring back speculative bets and head for the sidelines and keep the powder dry for the new year," said Stephen Innes, senior trader at FX/CFD firm OANDA Australia and Asia Pacific.
The New Zealand dollar NZD=D4 continued to consolidate at 0.6722. The Kiwi is benefiting after its U.S. counterpart was weighed down by disappointing economic news.
"The run of data weakness (in the U.S.) continues to reinforce the gradual message" from the Federal Reserve, said ANZ Bank.
The New Zealand dollar also found support in improving consumer sentiment and strong migration data.
Taking their cue from offshore moves, New Zealand government bonds 0#NZTSY= gained, sending yields 4 basis points lower at the long end and 3 basis points lower at the short end.
Australian government bond futures hovered near multi-week highs, with the three-year bond contract YTTc1 steady at 97.930. It touched its highest since mid-November.
The 10-year contract YTCc1 edged up half a tick to 97.1800, while the 20-year contract YXXc1 added 1.5 ticks to 96.6850. (Editing by Shri Navaratnam)