WELLINGTON/SYDNEY: The Australian and New Zealand dollars were mostly steady on Tuesday with the kiwi hunkering down near a post-float peak in the lead up to local inflation data.
Caution ahead of Federal Reserve Chair Janet Yellen's testimony due later in the day and a batch of data on Wednesday from China, the top export market for Australia and New Zealand, kept both Antipodean currencies hemmed in.
The Aussie was little changed at $0.9394, having traded in a narrow $0.9384/9402 range so far this session.
It continued to hug the 94 cent mark, which it has been flirting with since early April.
The market shrugged off minutes of the July 1 central bank policy meeting, which simply reiterated the Reserve Bank of Australia's pledge to keep interest rates at a record low for a while yet.
"This dated document did not contain material to dent current (debt) market pricing nor the AUD," said Annette Beacher, head of Asia-Pacific Research at TDSecurities in Singapore. Its kiwi peer traded at $0.8806, not far from a post-float peak around $0.8842 set back in August 2011.
It came within a whisker of that high last week, but has since been looking for a fresh catalyst.
Traders said inflation data on Wednesday could do the trick if it was high enough to stoke speculation the Reserve Bank of New Zealand (RBNZ) will keep raising rates out to year end.
The bank is thought almost certain to hike to 3.5 percent next week and markets imply rates could be at 4 percent by Christmas. Analysts polled by Reuters expect the annual inflation rate quickened to 1.8 percent in the second quarter, from 1.5 percent.
A strong economy and growing inflation risks have been the drivers behind a series of rate rises by the RBNZ since March, which has boosted the kiwi's yield appeal.
Technical support was seen at $0.8796, based on trendline support drawn from a low hit at the start of June, while resistance was seen into $0.8850, where offers were suspected.
Strong bids seen around $0.8700 should help minimise any big losses in the near term.
Both Antipodean currencies were also little changed against the euro but a touch firmer on the yen as gains in regional equities dampened demand for the safe-haven Japanese currency.
New Zealand government bonds slipped a touch, lifting yields a basis point across the curve. Australian government bond futures retreated from multi-month peaks. The three-year contract eased 2 ticks to 97.400, having a day earlier reached an 11-month high of 94.470.
The 10-year contract shed 3.5 ticks to 96.525, pulling back from a 13-month peak of 96.600 set on Monday.
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