The Australian dollar drifted higher on Tuesday after the central bank kept rates unchanged at a policy meeting and sounded a touch more optimistic about global growth, underlining the outlook for steady policy. The Australian dollar rose to $0.7550, from $0.7527 in early trade, away from a trough of $0.7452 touched on Monday. Resistance was seen around $0.7566 and support at $0.7473.
The Reserve Bank of Australia (RBA) kept rates at a record low of 1.5 percent following two easings last year. All 71 economists in a Reuters poll expected a steady outcome this week. Interbank futures show almost no chance of an easing this year, while a majority of 58 economists forecast an interest rate hike by June 2018.
Helping the Aussie was broad yen weakness which sent the Aussie to a one-month high of 84.26. It was last at 84.36, having gained more than a yen since Monday. Likewise, the New Zealand dollar rose 0.2 percent on the yen to 77.38, away from a trough of 76.09 touched last week. That also supported the New Zealand dollar against its US counterpart.
The kiwi ground up to $0.6925 from a near-eleven-month low of $0.6852 the previous day and a solid week of daily losses. New Zealand government bonds eased, sending yields 3 basis points higher at the long end of the curve. Australian government bond futures eased, with the three-year bond contract off 3 ticks at 98.130. The 10-year contract dropped 3.5 ticks to 97.3600, while the 20-year contract lost 3.5 ticks to 96.7750.
"The RBA reaffirmed its neutral stance and was more constructive in terms of the global economy," said Elias Haddad, a senior strategist at Commonwealth Bank of Australia.
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