News: Australia, NZ dollars skid after attack on U.S. forces in Iraq

The Australian and New Zealand dollars took a beating on Wednesday as risk sentiment was rocked by reports of attack at Iraq's Ain Al-Asad airbase, which hosts U.S. forces, in yet another sign of mounting tensions in the Middle East.

The Australian dollar AUD=D4 was set for a sixth straight session of losses as it hit a three-week trough of $0.6850.

The New Zealand dollar NZD=D4 was off 0.11% at $0.6633, hovering near its lowest since Christmas.

Against the safe haven Japanese yen, the antipodean currencies fell about 0.8% to near one-month lows after Reuters reported citing a U.S. official that rockets were fired at the airbase.

The U.S. military said Iran fired more than a dozen ballistic missiles against at least two Iraqi military bases hosting U.S.-led coalition personnel - Ain Al-Asad and another in Erbil.

Pentagon spokesman Jonathan Hoffman said in a statement the United States was working on initial battle damage assessments.

In response to news of the attacks, U.S. crude jumped more than $2, gold surged and S&P 500 E-Mini futures extended falls.

"The threat of retaliation the market was worried about last week looks to have become real, so there is no other way for markets to go really other than to go to safe havens," said Ray Attrill, head of forex strategy at National Australia Bank. "The presumption was that U.S. President Donald Trump wouldn't want to start a war this side of election, but that presumption would potentially be tested."

Australian government bond futures rallied, with the three-year bond contract YTTc1 up 5 ticks at 99.27. The 10-year contract YTCc1 jumped 7.5 ticks to 98.84.

New Zealand government bonds 0#NZTSY= gained too, with yields down 6-7 basis points at the long end of the curve.

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