Oct 21 (Reuters) - The Australian and New Zealand dollars advanced to new multi-month highs against the greenback on Thursday as local benchmark yields climbed, the U.S. dollar weakened, and investor optimism drove demand for risk-friendly currencies.

The Australian dollar AUD=D3 was last at $0.7534, up 0.3% to a three-month peak, while the New Zealand dollar NZD=D3 was at $0.7219, up 0.19% to its strongest in four months.

The kiwi "retains upward momentum," wrote analysts at Westpac in a note, since, "The U.S. dollar has retreated, global risk sentiment is rising, and NZ-U.S. yield spreads have risen significantly."

As for the Australian dollar "we remain torn between the near-term positives of super strong commodity prices and a weakening U.S. dollar, and the medium term view that global growth will slow sharply into Q4," they said.

Both Antipodean currencies have rallied strongly from one-month lows hit a few weeks ago when fears about slowing economic growth were high on investors minds, driving a rush for safe havens, especially the dollar.

This has since reversed, with the dollar at a three-week low against a basket of its peers =USD and significant weakness in the yen. The Aussie dollar is at its strongest against the Japanese currency AUDJPY= since February 2018.

In a sign of the risk-friendlier mood, the S&P 500 .SPX is back near its all-time closing high, and MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS is at its highest in a month.

New Zealand rates continued to rise, with 10-year sovereign yield NZ10YT=RR rising to 2.48%, the latest near-three-year high.

U.S. benchmark 10-year yields US10YT=RR are rising too, but more slowly, and were last at 1.6691%.

Three-year Australian government bond futures YTTc1 were little changed at 99.035, while the 10-year contract YTCc1 was at 98.1450.

(Reporting by Alun John in Hong Kong; Editing by Lincoln Feast.)

((alun.john@thomsonreuters.com;))