SYDNEY, April 19 (Reuters) - The Australian and New Zealand dollars tumbled on Friday as media reports of Israeli strikes on Iran spurred safe-haven demand into the U.S. dollar and local bonds.
The Australian dollar AUD=D3 fell 0.7% to $0.6376, the lowest since November and just within a striking distance of a major support level of $0.6340. It slipped 0.2% overnight and was set for a weekly loss of 1.4%.
The kiwi NZD=D3 lost 0.6% to $0.5866, testing a key support level of $0.5863. It eased 0.3% overnight and was headed for a weekly loss of 1.2%.
ABC News reported late on Thursday that Israeli missiles have hit a site in Iran, citing a U.S. official, in a major escalation of the Middle East hostilities.
Oil prices surged 3%, while Asia stocks tumbled almost 2%. "Markets have definitely reacted very, very swiftly to the news reports. We've seen a massive risk-off move with gold rallying, oil prices rallying, and traditional risk assets getting sold out hard," said Khoon Goh, head of Asia research at ANZ.
"Markets will be very worried that this is the start of a tit-for-tat escalation which could create huge volatility in the Middle East."
The risk proxy antipodeans also lost ground on the Japanese yen, which also benefited from safe-have demand. The Aussie AUDJPY=R tumbled 1.4% - the biggest daily drop since October last year - to 97.9 yen, a one-month low, while the kiwi NZDJPY=R lost 1.4% to 90.01 yen.
Local bonds rallied in tandem with Treasuries. The three-year government bond yield AU3YT=RR fell 9 basis points to $3.791%, while the 10-year government bond yield AU10YT=RR slid 8 bps to 4.209%.
