SYDNEY/WELLINGTON: The Australian and New Zealand dollars held their ground against the greenback on Thursday but were trapped in a slim trading range ahead of a four-day long Easter weekend and key event risks next week.
Australian consumer inflation data on Wednesday and an interest rate decision by the Reserve Bank of New Zealand (RBNZ) on Thursday could well shape the short-term outlook for both currencies.
The Aussie last stood at $0.9377, having drifted between $0.9364 and $0.9390 so far. Likewise, the kiwi traded in a thin $0.8620 and $0.8649 range after bouncing back from the 10-day low of $0.8578 hit overnight.
Both Antipodeans eased against the yen as investors bought back the safe-haven Japanese currency with the Nikkei struggling to stay in positive territory.
The Aussie and kiwi shed 0.1 percent to 95.64 and 88.01, respectively.
Against the kiwi, the Aussie was steady at NZ$1.0862.
It briefly popped above NZ$1.0900 for the first time in over two months on Wednesday after soft New Zealand inflation data and a fall in dairy prices knocked the kiwi broadly lower.
"AUD/NZD is on traders' radars with the pair facing a test of a critical technical level at 1.0900 ahead of the RBNZ rate decision next week," said David de Ferranti, Sydney-based analyst at FXCM.
Given the RBNZ is widely expected to hike interest rates by another 25 basis points, the market will be looking for clues on the pace of future tightening.
"If we see the suggestion of a less aggressive series of rate hikes from the RBNZ in light of the weaker-than-anticipated first quarter inflation reading this week, the currency may be vulnerable to pull back," de Ferranti added. Near-term support for the kiwi is seen at $0.8580 and $0.8531, with offers at $0.8640.
The flow of positive economic numbers continued on Thursday with a survey showing a 1.1 percent lift in job advertisements, while consumer confidence headed back to a seven-year high after a couple of soft months.
For Australia, consumer inflation data due on April 23 will be the main focus. Analysts polled by Reuters expect the annual headline number to come in at 3.2 percent, above the Reserve Bank of Australia's (RBA) 2-3 percent target rate.
Such an outcome could jolt markets into bringing forward an interest rate hike by the RBA even though the central bank tends to look at the underlying measures of inflation. For those, forecasts centred on a tamer 2.9 percent.
New Zealand government bonds were trading with a slight offered tone, sending yields a tick higher at the long end.
Australian government bond futures were a shade firmer with the three-year bond contract up 1 tick at 97.020, while the 10-year contract climbed 1.5 ticks to 96.035.
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