The Aussie was standing tall at $0.6785, a more than three-week high and comfortably above the 200-day moving average of $0.6728. It had risen 0.5% overnight to as high as $0.6804 before running resistance close to April's peak of $0.6808.
The kiwi dollar was resting at $0.6339, having also rallied 0.8% overnight to a one-month high of $0.6359. Resistance is tipped at April's peak of $0.6383, while support lies at $0.6160.
They ignored soft China trade data that showed imports contracted sharply in April while exports also slowed, heaping pressure on the world's second-largest economy.
Investors are now focused on Wednesday's U.S. consumer inflation report after Federal Reserve chair Jerome Powell said last week that policy decisions would be "driven by incoming data," while signalling a likely pause in the rate hiking cycle. The much-watched quarterly Senior Loan Officer Opinion Survey (SLOOS) from the Fed showed credit conditions continued tightening at the start of the year, but it was likely due to the impact of its aggressive rate hikes rather than severe banking sector stress. "Enthusiasm for the AUD, and NZD, is high as markets look to fading USD strength, with the prospect of an unwind of last year's extraordinary gains in the USD high on investors' minds," ANZ analysts said on Tuesday.
Kerry Craig, a global market strategist at J.P. Morgan Asset Management, said he expected the Aussie dollar to strengthen a little from here on the back of a weaker U.S. dollar, although it was unlikely to hit 75 cents given the lack of commodity support.
Reports that Australia's Labor government was set to reveal the first federal budget surplus in 15 years later in the day aided the currency marginally.
Data released on Tuesday showed Australian retail sales volumes fell for a second straight quarter during the first three months of the year, a drag on economic growth as rising interest rates and the high cost of living curbed consumer spending. Futures are still leaning towards a rate pause from the Reserve Bank of Australia in June after a surprise hike last week, but they have also priced in about a 50% chance of another increase by August. In New Zealand, the central bank is widely expected to raise rates to 5.5% this month, and markets see little chance of a cut by the end of the year. (Reporting by Stella Qiu; Editing by Jamie Freed)
