SYDNEY/WELLINGTON, June 28 (Reuters) - The Australian and New Zealand dollars enjoyed a short-covering rally on Tuesday as the market tried to find some equilibrium after last week's massive jolt when Britain voted to leave the European Union.
The Australian dollar AUD=D4 was back flirting with 74 U.S. cents, up nearly 1 percent on the day. It rose by roughly the same magnitude against the yen to 75.38 AUDJPY=R .
Likewise, its New Zealand peer climbed to $0.7049, pulling further away from Friday's trough of $0.6975. The kiwi was just shy of 72.00 yen NZDJPY=R , up 0.7 percent on the day.
"The absence of fresh fodder to push forward the Brexit narrative may offer shell-shocked markets a bit of space for digestion," noted Ilya Spivak, currency strategist at FXCM.
"Indeed, the pound is already on the upswing alongside commodity-bloc currencies and share prices in Asian trade while the yen and U.S. dollar decline."
Sterling was steadier after its eye-watering 11 percent slide in the past two sessions. The pound gained 0.7 percent to $1.3308 GBP=D4 , climbing from a 31-year trough of $1.3122 set overnight.
Traders said investors were perhaps counting on leaders at an EU Summit and central bankers at a European Central Bank forum to reassure markets later in the day.
New Zealand government bonds 0#NZTSY= were a tad firmer, along with Australian government bond futures. The three-year bond contract YTTc1 edged up 3 ticks to 98.540.
Yields on 10-year Australian bonds AU10YT=RR touched a fresh record low around 1.96 percent in early trade, before edging back to 1.99 percent. It was as high as 2.35 percent at one stage on Friday.