Chirpy Aussie dollar flirts with 75 US cents, kiwi muted

[SYDNEY] The Australian dollar flirted with a two-week high near 75 US cents on Tuesday, after the country's central bank gave no clear hint that it would ease policy again.

This combined with diminishing anxiety that Britain will leave the European Union saw the Aussie climb as far as US$0.7488 , a high last seen on June 9. It has since stepped back to US$0.7468, up 0.2 per cent on the day.

Minutes of the Reserve Bank of Australia's (RBA) June 7 meeting showed the central bank considered the current policy setting as appropriate for promoting sustainable economic growth and returning inflation to target over time.

The central bank left the cash rate steady at a record low 1.75 per cent in a widely expected move, having delivered an unexpected cut in May on disturbingly low inflation.

"The strength in the economic data is clearly providing some offset to the Bank's concerns about very low inflation," ANZ economists wrote in a note to clients.

"This more balanced approach compared with the May meeting suggests that an August rate cut remains a close call. We continue to think that very low inflation will trump the activity data, although our call remains quite data- and AUD-dependent."

The Aussie rose 0.5 per cent on the yen to 77.87 and was 0.4 per cent higher on its kiwi counterpart at NZ$1.0505 .

The New Zealand dollar edged down 0.2 per cent to US$0.7104, having on Monday touched a near two-week high of US$0.7131.

BNZ FX strategist Jason Wong said there was a chance to reach 72 US cents should Britain vote to stay in the EU at the June 23 referendum.

New Zealand government bonds eased, tracking a move in global interest rates. Yields were two basis points higher at the short end and three basis points at the long end.

Australian three-year government bond futures eased five ticks to 98.410 while the 10-year contract shed 2.5 ticks to 97.8250.

REUTERS