SYDNEY: The Australian and New Zealand dollars clung to rare gains on Tuesday as commodities pared a little of their recent losses and the US dollar paused its meteoric run.

The Reserve Bank of Australia (RBA) offered indirect support by reiterating that interest rates were unlikely to be cut soon, and might even have to be raised under some scenarios.

In particular, policy makers believed it would take more than one favourable quarterly inflation report to justify an easing, suggesting a benign reading in the fourth quarter report due in late January would not alone trigger a cut.

“The discussion highlights that a rate cut as soon as February looks very unlikely given policy is only modestly restrictive and the uncertainties the RBA is grappling with are unlikely to be resolved that quickly,” said Tapas Strickland, head of market economics at NAB.

Last week, NAB shifted its timing on a cut to May from February and warned it might even be later.

Markets imply around a 40% chance of a quarter-point reduction in the 4.35% cash rate in February, and 60% for April. A move is not fully priced in until May.

The steady outlook helped the Aussie hold at $0.6506 , having bounced 0.7% overnight and away from last week’s three-month low of $0.6441.

Resistance now comes in at $0.6515 and $0.6550. It was aided by a 0.9% rally on the yen to 100.23 after the Bank of Japan offered little clarity on whether rates would be hiked in December.

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The kiwi dollar trailed at $0.5889, after bouncing a modest 0.4% the previous session from a one-year trough of $0.5837.

Resistance lies at $0.5912 and $0.6037.

Markets are still confident the Reserve Bank of New Zealand will chop its 4.75% cash rate by 50 basis points at a policy meeting next week, and perhaps by another 50 at the following meeting in late February.