SYDNEY/WELLINGTON (Reuters) - The Australian and New Zealand dollars held tight ranges on Tuesday as traders awaited results from the U.S. midterm elections, the first major test of President Donald Trump's big tax cuts and trade policies.
The elections are expected to boost the Democratic Party's representation in the lower house, where it could win control, while Republicans are expected to retain the Senate.
The outcome, expected early Asian time on Wednesday, is closely watched because a win for Trump's Republican Party could embolden him to pursue more of his political agenda, including tax reforms. Analysts expect the U.S. dollar would rally if Republicans retain both houses of congress.
The Australian dollar <AUD=D4> was last flat at $0.7211. The currency had been volatile in recent sessions, hitting a five-week peak of $0.7259 last week but has since stabilised.
Investors shrugged off a central bank rate decision earlier in the day in which Reserve Bank of Australia (RBA) Governor Philip Lowe painted a bullish economic outlook.
The RBA left rates at 1.50 percent in a widely expected move and signalled policy will stay there for some while yet.
A Reuters poll of 39 analysts had found all but one expected cash rates to be left unchanged this week, with an increase not expected before early 2020. <AU/INT>
"Even if the economy evolves next year in-line with the RBA’s constructive economic and inflation forecasts, the first tightening is unlikely until around year end in our opinion," said Citi economist Paul Brennan.
Across the Tasman Sea, the New Zealand dollar <NZD=D4> traded at $0.6651, not far from a recent five-week high of $0.6689.
Analysts await the outcome of a dairy auction due early Wednesday to see where prices for milk, New Zealand's top export, are headed.
Also on Wednesday, New Zealand reports third-quarter employment report, which would provide some indication on the health of the country's economy.
The Reserve Bank of New Zealand announces its rate decision on Thursday at which it is expected to leave policy at an all-time low of 1.75 percent.
(Editing by Sam Holmes)
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