SYDNEY/WELLINGTON: The Australian and New Zealand dollars crept up from one-month lows on Wednesday, but investors stayed cautious ahead of data from China and the United States and a Federal Reserve policy meeting.
The Aussie edged up to $0.9283, from a low of $0.9227 in the prior session.
It was on track to eke out a gain of 0.1 percent in April, but was still a fair distance away from a peak of $0.9461 touched earlier in the month. For the year, the Aussie is up 4 percent.
The Aussie found support after data showed housing credit expanding at the fastest annual pace since mid-2011. The revival in the housing market has been helping offset a cooling in mining investment.
It is also one reason the market has all but priced out the chance of any further cuts in the 2.5 percent cash rate and is flirting with the idea of a hike early next year.
Also helping the Aussie is a modest bounce back against the euro after weaker-than-expected German inflation stoked speculation of more policy stimulus in Europe.
Still, the Aussie is expected to meet resistance around $0.9315 in the near term. Major support is seen at $0.9205.
"The Aussie and kiwi are not in the spotlight with May day holidays in Asia tomorrow and Japan off for the Golden Week," said Annette Beacher, head of Asia-Pacific research at TD Securities in Singapore.
The Bank of Japan's policy meeting ended with the usual commitment to its massive stimulus programme, just as expected.
The Federal Reserve later on Wednesday is likely to pare back its bond buying by a further $10 billion, with all eyes on any mention on the outlook for rates in the post-meeting statement. The New Zealand dollar was trading a touch more firmly at $0.8560, bouncing back from a near four-week low of $0.8517 in the previous session.
Local data showed a solid lift in home building approvals, while business confidence eased in April but remained strongly positive despite rising interest rates.
"We can't see evidence of a material turn across the economy despite interest rates moving up - with prospects of more to come - and the New Zealand dollar remaining elevated," said ANZ Bank chief economist Cameron Baggie.
The economy looks to be in a "groove" that would see growth outpace other developed nations this year, he added.
New Zealand's rising interest rates and strong economic performance are key factors in drawing investor demand for the kiwi.
Near-term support for the New Zealand dollar was seen at $0.8515, with offers at $0.8590. It was on track to show a loss of 1.3 percent in April, but was still up over 4 percent on the year so far.
The kiwi benefited also from a solid gain on the euro, which retreated from a five-week high to a low of NZ$1.6105 after the soft German inflation data. The euro last traded at NZ$1.6131.
New Zealand government bonds were slightly firmer, sending yields a couple of ticks lower across the curve. Australian government bond futures eased, with the three-year bond contract down two ticks at 97.060.
The 10-year contract was also off two ticks, at 96.050, having touched a seven-month peak earlier this week.
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