SYDNEY/WELLINGTON: The Australian and New Zealand dollars stood firm on Tuesday, underpinned by a stabilisation in commodity prices as investors awaited key Chinese economic indicators amid global growth concerns.
The Australian dollar paused at $0.8785, having gained 0.4 percent on Monday and pulling away from a four-year trough of $0.8642 touched earlier this month.
Immediate focus was on a raft of Chinese economic data, including GDP for the July-September quarter, industrial output and retail sales for September.
Growth in the world's second largest economy is expected to slow to 7.2 percent from a year earlier, which would be its weakest performance since early 2009.
The Australian dollar - often seen as a liquid proxy of China's growth prospects given Australia's large trade exposure to China - could see a big reaction to the Chinese data.
"There is risk we see growth for China at 7 percent, which could send the Aussie around 40-50 basis points lower," said Joseph Capurso, a strategist at Commonwealth Bank of Australia.
However, he sees potential for the Aussie to bounce back on Wednesday following the release of Australian inflation data. Capurso expects a higher CPI reading than forecasts centering on a quarterly rise of 0.4 percent.
Support for the Aussie was found around $0.8735 with resistance between $0.8810 and $0.8860.
At home, minutes of the Oct 7 policy meeting of the Reserve Bank of Australia (RBA) contained no surprise with the bank reiterating a stable interest rate outlook.
The RBA this month left its cash rate unchanged at a record low 2.5 percent, where it has been since August last year.
The New Zealand dollar also held steady at $0.7967, keeping in range of a three-week high of $0.7997 touched last week. Against the yen, it traded at 85.10 yen, near a one-week high around 85.35 touched on Monday.
After a deep sell-off since July which knocked the kiwi from a three-year high of $0.8839, it has stabilised just below $0.8000.
The kiwi has also been drawing support from a string of data showing that New Zealand's economy continues to grow at a reasonable clip even as global dairy prices slump.
"It's relatively stable at the moment. There's good support around $0.7900 and offers at $0.8000," said Tim Kelleher, head of institutional FX sales at ASB.
"Given the big run on the way down, the market is happy to sit on its hands for now
..Equity markets have calmed down so we'll see whether a trend emerges from here."
He added that growing support for the kiwi may prompt a pop above $0.8000 in the near term, although a rise towards $0.8050 would be an opportunity to sell.
New Zealand government bonds rose, pushing yields 2.5 basis points lower along the curve.
Australian government bond futures rose, with the three-year bond contract up 5 ticks at 97.450. The 10-year contract added 6.5 ticks to 96.735.
The premium offered by Australian 10-year yields over 3-year yields stood at 65 basis points (bps), having bounced from 62 bps, the smallest margin since May last year. It was at 135 basis points early in January.
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