The Australian and New Zealand dollars edged higher on Tuesday amid some signs of progress in the Sino-US trade talks while the Aussie got a small lift as the country's central bank skipped a chance to cut interest rates.
The Aussie was last up 0.2% at $0.6903, not far from a recent three month high of $0.6929, having been as low as $0.6877 early in the session.
The kiwi was up a fraction at $0.6408, having hit a a 2-1/2 month top of $0.6456 just last week.
Part of the strength in the antipodean currencies was thanks to growing optimism the United States and China are on the verge of reaching a preliminary agreement to scale back their bruising trade war.
Bond markets were relatively quiet with yields edging higher from near historic lows. Australian three-year and 10-year bond futures slipped 4 ticks each to 99.135 and 98.78, respectively.
In recent days, Beijing and Washington have given encouraging signs of progress in trade talks. The US government is considering dropping some tariffs on Chinese goods, the Financial Times reported on Monday. Both the Aussie and kiwi have shown a strong correlation with the yuan in recent months, with investors using them as a liquid proxy for trade risk.
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