SYDNEY/WELLINGTON: The Australian dollar held steady on Tuesday ahead of inflation data that is expected to dim prospects for another cut in interest rates this year.
The Australian dollar was holding at $0.7610, having found solid support around $0.7590 for three straight sessions.
The Aussie is up 4.5 percent so far this year. It has been resilient in recent weeks against a resurgent U.S. dollar, helped by a rebound in the price of iron ore and coal - Australia's top exports - and data showing China's economy was stabilising.
Dalian iron ore futures soared to its highest level since August 2014 on Tuesday, underlining demand from China, Australia's No.1 trading partner.
Also helping the Aussie is speculation the Reserve Bank of Australia's (RBA) easing cycle could be over if consumer price index figures out Wednesday confirm underlying inflation steadied around 1.5 percent in the third quarter.
"Traders are fairly comfortable playing either side of the $0.7450/$0.7750 range for the moment," said Greg McKenna, chief market strategist at AxiTrader.
"Naturally that could all change tomorrow with the release of the Australian Q3 CPI - but only if it is an incredibly weak number that undermines support for the Aussie."
Elsewhere, the Aussie continued to rise against its New Zealand cousin, and posted its second straight day of gains on the yen.
The New Zealand dollar stood at $0.7139, bouncing after three sessions of losses.
The kiwi is on track for its first monthly loss since May as the markets narrows the odds on a rate hike from the U.S. Federal Reserve.
"The NZD has succumbed to USD strength of late; with the move coinciding with firming expectations of a December Fed rate hike," said ANZ Bank Senior Rates Strategist David Croy in a note.
Earlier, the Reserve Bank of New Zealand announced it would start making projections for the official cash rate rather than the 90-day bank bill rate, helping make the policy outlook more transparent.
New Zealand government bonds gained, sending yields 1.5 basis points lower at the short end and 3 lower at the long end.
Australian government bond futures were weak, with the three-year bond contract down 2 ticks at 98.31. The 10-year contract slipped 3.5 ticks to 97.7450.
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