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[SYDNEY] The Australian and New Zealand dollars treaded water on Tuesday, as the world awaited a speech by US President Donald Trump in which he may put more meat on the bones of his fiscal and tax policies.
Markets have been longing for more detail on Mr Trump's promised stimulus plans to judge if they really would lift inflation and economic growth, and thus add to the case for higher US interest rates.
Such an outcome would tend to boost the US dollar across the board, including against the Australian dollar. The uncertainty left the Aussie stuck at US$0.7681, well within the recent US$0.7650/0.7715 range.
The New Zealand dollar was unchanged at US$0.7189, after two consecutive days of falls.
"If anyone can make AUD break out of range, it is likely Trump," said Matt Simpson, senior analyst at ThinkMarkets in Melbourne.
"All eyes are on his speech as traders eagerly await clarity over his "phenomenal" tax plan and fiscal spending. Failure to live up to his own hype could result in a nasty bump for stocks, the US dollar and risk sentiment in general."
Traders were also awaiting Australia's gross domestic product data due on Wednesday, expected to show growth rebounded by around 0.7 per cent in the fourth quarter following a shock contraction in the previous quarter.
Official data on Tuesday showed Australia boasted its smallest current account deficit in 15 years, driven by booming resource exports.
"The rise in commodity prices is also providing a boost to the public coffers courtesy of higher company tax receipts and a lift in royalties," said Gareth Aird, economist at Commonwealth Bank.
"Nominal GDP is set to post a solid lift as the fruits of rising commodity prices are reflected in higher income growth. We have forecast a quarterly increase of 3 per cent which would take annual growth to its strongest pace in five years."
Elsewhere, the Aussie stood near four-month highs on its New Zealand cousin. It was mostly flat on the yen while the euro came off a near two-year low on the Aussie.
In New Zealand, data out on Tuesday showed a larger-than-expected trade deficit while business confidence dipped.
New Zealand government bonds eased, sending yields 1.5 basis points higher at the long end of the curve.
Australian government bond futures slipped, with both the three-year bond contract and the 10-year contract down one tick at 98.01 and 97.25, respectively.