By Cecile Lefort and Rebecca Howard
SYDNEY/WELLINGTON, Dec 16 (Reuters) - The Australian and New Zealand dollars were sidelined on Wednesday with investors reluctant to take big bets before a likely rate hike in U.S. interest rates.
The Australian dollar was pinned at $0.7197, having lost 0.7 percent on Tuesday. Support was found at $0.7150 with resistance at $0.7280.
It found some limited help after Reserve Bank of Australia Governor Glenn Stevens gave an upbeat assessment on the economy, setting the bar high for any further cuts in rates.
All eyes are on the U.S Federal Reserve, which is widely expected to deliver its first rate increase in nearly a decade on Wednesday afternoon Washington time.
Investors will scrutinise the statement and comments for hints on how quickly the Fed will tighten following the initial move.
One dealer expects the Aussie to initially drop around 50 pips before reversing course and rallying hard towards 73 cents.
The New Zealand dollar NZD=D4 edged up to $0.6759, having climbed to a seven-week high the previous day.
The kiwi broke key resistance between $0.6800 and $0.6825 on Tuesday, but could not sustain this level after a rally in the U.S. dollar.
The global dairy price auction held early Wednesday morning also dragged on the kiwi. The fortnightly auction showed that dairy prices had risen for a second sale, but by less than the market expected.
Data released on Tuesday provided some support, showing that New Zealand posted a slightly smaller-than-expected current account deficit in the third quarter. urn:newsml:reuters.com:*:nW9N13Z002
New Zealand government bonds eased, sending yields as much as 4.5 basis points higher.
Australian government bond futures eased, with the three-year bond contract off 3 ticks at 97.840. The 10-year contract fell 4.5 ticks to 97.0650, while the 20-year contract was down 5 ticks to 96.5750. (Editing by Richard Borsuk)