SYDNEY: The Australian and New Zealand dollars were trading near recent highs on Tuesday helped by high commodity prices and as investors wagered surging inflation will hasten rate rises, ahead of Australia's quarterly consumer price data on Wednesday. The Australian dollar crept up 0.27% to $0.7511, after rising to $0.7546 last week, its highest level since July 6.

The Aussie has support at around $0.7465, a level from which it has not fallen in almost a week. The New Zealand dollar was also a little higher at $0.7171, trading below last week's four-month high of $0.7219, which was triggered by consumer prices rising at decade-high speed. The Kiwi has resistance around $0.715 and $0.713. Iron ore prices, Australia's number one export earner, were higher in choppy trading on Tuesday.

Bond yields were again higher, with New Zealand yields rising between 3 and 5 basis points at the short end of the curve, while yields at the longer end were flat. "Antipodean rates have been dragged into pricing yet earlier and greater tightening, led by Fed pricing, and a red hot NZ CPI result," said JPMorgan Chief Australia and New Zealand economist Ben Jarman.

n Australia yields on three-year government bonds were up four basis points to 0.791%, their highest since Oct. 20, as surging yields and inflation expectations are defying policymakers' insistence that interest rates can hold at record lows for years. Markets have priced in increases beginning next year and some 100 basis points of tightening by the end of 2023, while the RBA does not expect to raise rates before 2024 and has played down the importance of quarterly inflation readings.

On Tuesday, weekly inflation expectations as measured by the ANZ-Roy Morgan index were 0.3 per cent higher to 5%, the highest value since December 2014, according to ANZ Head of Australian Economics, David Plank. Official inflation data is due out on Wednesday.