SYDNEY: The Australian and New Zealand dollars drifted lower on Tuesday as caution in global markets outweighed upbeat economic news and a solid sale of new Aussie government bonds.
The Aussie slipped to $0.7597, as speculators looked to test support around $0.7595. The currency has now spent three weeks rattling around in a $0.7533/7676 range and a break lower would likely unleash a large move.
The kiwi dollar eased to $0.7007 and was nearing support at $0.6998. The kiwi has also been trapped between $0.6946 and $0.7070 for three weeks or so.
The US dollar found support from wagers that US consumer price data due later would show a big increase in headline inflation and push Treasury yields higher.
The Aussie found only fleeting support from Chinese trade data showing surprisingly strong 38.1% growth in imports, a positive for Australia given China is the country's biggest export market.
Domestic data also remained upbeat with NAB's influential business survey finding the strongest conditions on record in March, with sales, profits and employment all surging.
A separate survey from ANZ showed its consumer confidence index surged 5.9% last week to its highest since late 2019.
There was evidence of robust demand for Australian debt as a syndicated sale of A$14 billion ($10.64 billion) in new 2032 bonds drew bids worth A$48 billion.
Yields on current 10-year bonds edged up 2 basis points to 1.75%, in line with US Treasuries, but remained short of last week's peak of 1.833%.
Across the Tasman, markets are awaiting a policy meeting from the Reserve Bank of New Zealand (RBNZ) on Wednesday that is certain to keep rates at record lows, and likely to reiterate a dovish outlook for policy.
Since the last meeting, the government has introduced new measures to cool the red-hot housing market which should make it easier for the central bank to maintain its stimulus.
"We expect the RBNZ to keep its policy settings unchanged and to not surprise markets," said Westpac economist Imre Speizer.
"That said, a dovish surprise via the commentary is more likely than a hawkish surprise. Markets would reduce pricing for a rate hike in 2022 and NZD/USD would shed a third of a cent."