SYDNEY: The Australian and New Zealand dollars inched higher on Thursday against their US counterpart which hit a two-week low as the Federal Reserve wrongfooted bulls by insisting that rate rises were still far off.

Overnight, the Fed sounded confident about the US economy but Chairman Jerome Powell was more circumspect in his news conference, saying rate increases were "a ways away" and the job market still had "some ground to cover".

The prospect of extended US monetary stimulus, boosted riskier assets such as the Aussie and kiwi dollars.

The Australian dollar rose from a one-week trough of $0.7317 touched on Wednesday to as high as $0.7381. The currency faces critical chart resistance around $0.7390, a breach above could take it as high as $0.7490.

The New Zealand dollar was last at $0.6962, up from a one-week low of $0.6968 touched on Wednesday.

The main focus for investors next will be US gross domestic product data due later in the day where forecasts vary wildly but the consensus is for 8.5% annualised growth.

"US growth look to have peaked - at least in the short term - in May so tonight's number will be closely watched," said Steven Dooley, currency strategist at Western Union Business Solutions.

Investors are also keeping a tab on a rapidly spreading COVID-19 outbreak in Australia's most populous city of Sydney which is in its fifth week of lockdown as authorities scramble to stamp out the highly transmissible Delta variant.