The Australian dollar traded in a tight range on Tuesday, as volumes were thin in a holiday-shortened week and ahead of the all-important quarterly inflation report, while its New Zealand cousin hovered near two-month lows.
The Australian dollar held at $0.7127, drifting lower after hitting a two-month top of $0.7206 last week following stronger-than-expected Chinese economic data and a surprisingly soft reading on US core inflation.
That combination helped the Aussie edge above a 200-day moving average of $0.7187 last week for the second time in 12 months. The New Zealand dollar was slightly weaker at $0.6671, languishing near its lowest since early January. The kiwi has fallen or stayed flat in seven of the last 10 sessions.
New Zealand government bonds were slightly higher with yields down about 2 basis points at the long end of the curve. Australian government bonds too rose with the three-year contract up 4.5 ticks at 98.60 and the 10-year contract adding 5 ticks to 98.090.