SYDNEY/WELLINGTON: The Australian and New Zealand dollars held firm on Tuesday in subdued trade as investors kept to the slidelines ahead of the outcome of the Reserve Bank of Australia's (RBA) policy meeting.
RBA seen holding its 3.5 pct cash rate unchanged after back-to-back cuts, in contrast to the ECB and Fed, which face mounting pressure to act following recent dismal data. Decision due at 0430 GMT.
The Aussie at $1.0264, vs $1.0242 in New York, not far from a two-month peak of $1.0279 struck overnight. It gained over 2 cents on Friday, the biggest daily rise so far this year, following a euro zone debt deal.
A record 27.3 pct jump in building approvals helping lift Aussie to session highs, but it remains in a relatively slim $1.0230/75 range so far. $1.0300 seen capping the top side, with support at $1.0126.
Interbank futures giving a mere 12 pct chance of a quarter-point cut, although markets are still priced for around 75 bps worth of easing over the next 12 months.
The Aussie could react to the tone of the RBA statement with some expecting the bank to sound less dovish given signs of resilience in the domestic economy.
The NZ dollar trades at $0.8043, little changed on the day, but supported after pushing above $0.8020, its 100-day moving average. Traders see resistance around $0.8060.
Aussie, kiwi broadly bolstered after they clock 4-1/2 month highs vs the euro in early Australasian trade. The single currency approaches lifetime lows vs the Antipodeans as its broad selling trend continues.
Aussie/kiwi a touch lower at NZ$1.2745. Traders expect the Aussie to climb vs its New Zealand counterpart if the RBA issues a relatively neutral statement, which will cement views that it is on hold in the coming months.
NZ government bonds little changed on the day, with yields flat.
Australian government bond futures subdued with the three-year contract down 0.06 points at 97.470 and the 10-year 0.02 points lower at 96.895.
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