SYDNEY: The Australian and New Zealand dollars rose slightly against the greenback on Tuesday, helped by improving commodity prices, and some weakness in the US currency ahead of a central bankers convention hosted by the Federal Reserve.

The Aussie dollar was only 0.08% higher at $0.7216 at 4:33 GTM, putting it 1.5% away from the nine-month low of $0.7106 it reached on Friday. The next resistance level lies around $0.7269.

The kiwi dollar too was slightly higher at $0.6895. To now stand around 1.3% stronger than Friday's nine-month low of $0.6807.

A 3% jump in iron ore prices helped both currencies to steady.

"The recovery in currencies is fuelled by short covering especially the oversold commodity currencies," Philip Wee DBS foreign exchange strategist said.

"This is likely to be limited ... (and) a consolidation rather than the start of a trend reversal."

Both currencies have been laid low by weak commodity prices and the spread of the Delta variant at home, with Sydney extending a strict lockdown until the end of September and New Zealand lengthening its national lockdown.

As a result of the lockdown, the Reserve Bank of New Zealand (RBNZ) decided against raising interest rates this week.

"The recovery in equities and risk appetite, together with what the market appears to be viewing as 'light' at the end of the 'lockdown tunnel' has helped the Kiwi claw its way back," said ANZ analysts.

"On balance the market seems to be slanting toward the view that NZ will beat Delta, and if that is the case, that should put official cash rate hikes ... back on the table later in the year."

A speech by US Fed Chair Jerome Powell at the Jackson Hole conference this week will be closely watched by investors betting on when the Fed starts to wind down its bond-buying program, traders said.

New Zealand bonds fell, with yields rising three basis points across the curve, while yields on 10-year Australian debt were 3.6 basis points higher at 1.137%, putting it 12 basis points below US yields. Yields in Australian 3-year bonds rose two basis points to 0.219%.