By Cecile Lefort and Charlotte Greenfield
SYDNEY/WELLINGTON, Feb 22 (Reuters) - The Australian dollar held its own against a sturdy greenback on Wednesday and hovered near multi-month peaks against the euro and Swiss franc as investors poured money into higher yielding assets.
The Australian dollar AUD=D4 was steady at $0.7676, off a low of $0.7650 on Tuesday. It remained within sight of $0.7732, a three-month peak touched recently, with a break above opening the way to the November high of $0.7778.
Underpinning the Aussie was rising prices of iron ore MYSTL-RIIOI-IMP , Australia's top export earner, which touched the highest since mid-2014.
On top of that the Aussie benefited from carry trade demand where investors borrow in lower yielding currencies - euros and Swiss francs in this case - to invest in higher yielding assets.
The euro fell to two-year lows at A$1.3713 EURAUD=R and a break of A$1.3679 would be the weakest since 2013.
The common currency has lost 5.7 percent so far this year, largely because of market jitters about the outcome of elections in several European countries.
The Aussie also held near two-year peaks against the Swiss franc at 0.7734 francs AUDCHF=R .
At home, Philip Lowe, governor of the Reserve Bank of Australia, gave the clearest signal yet that further cuts in interest rates would not be in the national interest as the danger of a debt-fuelled boom and bust was too severe. overriding message from the Governor is that he is very reluctant to cut the cash rate from here," said Gareth Aird, a senior economist at Commonwealth Bank of Australia.
"Lowe basically stated that it would take the unemployment rate to rise from here for policy to be eased again."
The RBA has kept interest rates at a record low 1.50 percent after last easing in August.
The New Zealand dollar NZD=D4 had a soft tone as a dent in global dairy prices hit investor confidence.
The Kiwi fell to $0.7162, having touched $0.7130 on Tuesday.
Prices for dairy, the country's largest goods export earner, dropped 3.2 percent at an auction held early on Wednesday, on signals that milk production would be higher than expected. kiwi struggled against its Antipodean neighbour, with the Aussie AUDNZD=R reaching a three-month high of NZ$1.0737. It traded last at NZ$1.0717.
New Zealand government bonds 0#NZTSY= eased, sending yields 3.5 basis points higher at the long end of the curve.
Australian government bond futures were also softer, with the three-year bond contract YTTc1 down 2 ticks at 97.930. The 10-year contract YTCc1 also shed 2 ticks at 97.1500, while the 20-year contract YXXc1 eased 2.5 ticks to 96.5300. (Editing by Shri Navaratnam)