SYDNEY/WELLINGTON (Reuters) - The Australian dollar pushed ahead against a generally softer U.S. currency on Wednesday, a marked contrast to its New Zealand counterpart which suffered a sudden setback as speculators bailed out of crowded long positions.
The Aussie crept up to $0.7657 <AUD=D4> and away from a $0.7587 low touched at the start of the week.
The U.S. currency was dogged by political uncertainty as emails released by President Donald Trump's eldest son suggested he welcomed Russian help in last year's election campaign.
The Aussie was underpinned by a rally in iron ore, Australia's single biggest export earner, which hit its highest in more than two months amid rising prices for steel in China.
A recent run of upbeat domestic data has also bolstered sentiment, though it had yet to show up in polls of Australian consumers. A Westpac survey found the mood still cautious even as businesses reported the best times since early 2008.
Historically, business surveys are a more accurate predictor of activity in the economy than polls of consumer sentiment, which can prove fickle from month to month.
The Aussie's biggest advance came against the New Zealand dollar as it jumped to a six-week peak of NZ$1.0591 <AUDNZD=>, having added 1.2 percent on Tuesday.
Traders noted that speculative kiwi long positions on the Chicago Mercantile Exchange had surged in the past month to reach their highest since 2013, leaving the currency vulnerable to a pullback.
Analysts at Westpac recommended shorting the kiwi against the Aussie with a target of NZ$1.0710.
"NZ data is moderating, particularly in the housing sector, and core inflation indicators point to benign forward pressures," the analysts wrote in a note.
They saw a risk that consumer price inflation figures for the second quarter due next week could undershoot policy makers' forecasts and further push out the timing of any hike in interest rates.
Against the U.S. dollar, the kiwi had steadied at $0.7228 <NZD=D4> after shedding 0.7 percent on Tuesday.
New Zealand government bond prices <0#NZTSY=> were higher across the curve, with yields down 1.5 basis points.
Australian government bond futures also gained, with the three-year <YTTc1> and 10-year contracts <YTCc1> both up 2 ticks at 97.980 and 97.2700 respectively.
(Editing by Shri Navaratnam)
