SYDNEY/WELLINGTON (Reuters) - The Australian and New Zealand dollars slipped from their peaks on Monday as the greenback bounced from a multi-year trough after North Korea steered clear of escalating tensions at its foundation day over the weekend.
North Korean leader Kim Jong Un hosted a massive celebration on Saturday to congratulate his nuclear scientists and technicians who developed the country's sixth and largest nuclear test a week ago.
Relief that it did not launch another missile as some South Korean officials had warned lifted the U.S dollar <.DXY> from its lowest since January 2015 against a basket of currencies.
In turn, the Australian dollar <AUD=D4> fell from a 2-1/2 year peak of $0.8125 to $0.8046. The Aussie rose 1 percent last week for its fourth consecutive weekly gain.
Immediate chart resistance lies at $0.8168 while critical support is seen around $0.8000.
The Aussie has been on an uptrend since the beginning of June largely as the U.S. dollar went downhill on diminishing expectations of another Federal Reserve hike this year and geopolitical tensions around North Korea.
"AUD/USD has finally, convincingly, broken above $0.8000 after several failed attempts in recent months," said Joseph Capurso, currency strategist at Commonwealth Bank of Australia.
"This week AUD will be supported by a heavy USD and our prediction of a strong 20,000 increase in Australian August employment."
Australia's jobs growth has accelerated markedly this year to reach an annual 2 percent, supporting household incomes and spending in the face of record-low wage rises. Leading indicators of labour demand suggest this strength will persist for a while yet. <ECONAU>
The employment data is due on Thursday.
The New Zealand dollar <NZD=D4> fell 0.2 percent to $0.7249, edging away from a three-week high of $0.7338 touched on Friday.
The kiwi has gone out of favour, falling in five of the last six weeks ahead of a general election where Labour Party leader Jacinda Ardern is seen toppling Prime Minister Bill English and his National Party.
The kiwi touched a three-month trough of $0.7132 in August, but has since rebounded on broad U.S. dollar weakness.
"Sentiment toward the USD remains downbeat," ANZ said in a note.
"Locally, general election jitters will continue, and combined with further softening in house prices and dairy futures prices, will cap NZD."
New Zealand government bonds <0#NZTSY=> were mixed, with yields up 2 basis points at the long end of the curve and down 1 basis point at the short end.
Australian government bond futures slipped, with the three-year bond contract <YTTc1> down 2.5 ticks at 97.995. The 10-year contract <YTCc1> fell 3.5 ticks to 97.3900.
(Reporting by Swati Pandey; Editing by Eric Meijer)
