SYDNEY (Reuters) - The Australian and New Zealand dollars recouped some lost ground on Tuesday after Australia's central bank sounded resolutely upbeat on the economy as it held rates steady, confounding bears who had wagered on a more dovish outcome.
The Aussie dollar <AUD=D3> popped up to $0.7224, from $0.7188, after the Reserve Bank of Australia (RBA) ended its monthly policy meeting with scant change to its statement.
The currency hit a 20-month trough of $0.7165 on Monday amid turmoil in emerging markets and doubts about the outlook for global growth.
Speculators had thought the RBA might sound more cautious as a result, particularly given recent moves by some local banks to raise their mortgage rates.
Instead, the central bank played down the "small" shift in home loan rates, noting the "average mortgage rate paid is lower than a year ago."
It also stuck with a forecast of 3 percent-plus economic growth this year and next, while estimating growth had been above trend for the first half of this year.
Government figures for gross domestic product (GDP) are due on Wednesday and analysts have been tipping growth of around 0.7 percent for the quarter and 2.8 percent on the year.
"The AUD bounced on the lack of dovish tones, but we don't see anything in the statement for guidance one way or the other," said Annette Beacher, chief Asia-Pacific macro strategist at TD Securities.
"These monthly Board meetings 'should' be non-events for quite some time," she said. "We still tilt towards a more hawkish tone being introduced next year as inflation and wages growth creep higher."
Domestic data out Tuesday showed the country's current account deficit widened to A$13.5 billion in the June quarter, largely because foreign investors were earning more on their holdings of Australian resource stocks.
Goods exports still rose in volume terms and likely added modestly to economic growth in the June quarter, as did government spending.
The New Zealand dollar <NZD=D3> got a lift with the Aussie, rising to $0.6600 and away from a low of $0.6586.
New Zealand government bonds <0#NZTSY=> were a shade firmer with yields down 1 basis point or so.
Australian government bond futures eased back in the wake of the RBA's steady statement.
Three-year bond contract <YTTc1> dipped 1.5 ticks to 98.000, while the 10-year contract <YTCc1> went flat at 97.5800. The latter had just hit its highest since Jan. 2017.
(Editing by Shri Navaratnam)
