SYDNEY: The Australian dollar scaled the 74 cent barrier on Tuesday to reach a two-year peak as the prospect of bottomless US policy stimulus fuelled demand for reflationary trades, overshadowing a dovish turn by the country's central bank.

The Aussie looked set to score its seventh straight session of gains at $0.7407, having cleared major resistance around the December 2018 top of $0.7394. The next target is peaks from July 2018 at $0.7484.

The New Zealand dollar reached the highest since June last year at $0.6767, breaking resistance around $0.6755. Its next target is $0.6789.

The currencies have been on a tear as the Federal Reserve breaks with decades of policy practice to focus on supporting employment rather than fighting inflation, ensuring rates will stay super low for a long time to come.

Australian government bond futures were left little moved on the day, with the 10-year contract up half a tick at 99.0005.

The Reserve Bank of Australia (RBA) is sticking with its 2-3% inflation target and kept interest rates steady at 0.25% after a monthly policy meeting on Tuesday.

Yet it did surprise by expanding a funding program for banks and extending the deadline out to mid-2021, which should in turn encourage them to keep lending to customers.-Reuters