By Cecile Lefort and Rebecca Howard
SYDNEY/WELLINGTON, June 7 (Reuters) - The Australian and New Zealand dollars held just below one-month highs on Tuesday as investors awaited the Reserve Bank of Australia's (RBA) policy decision later in the day.
The Australian dollar AUD=D4 pivoted around $0.7370, having climbed as high as $0.7392 on Monday.
The Aussie regained some ground against the yen at 79.34 yen AUDJPY=R , from a four-month trough of around 78 yen set in the last session.
The RBA announces the outcome of its June policy meeting at 0430 GMT and is widely expected to keep rates at a record low of 1.75 percent. It eased unexpectedly last month, citing alarmingly low inflation.
"While the RBA will no doubt be concerned about these weak (inflation) readings, we do not see a follow-up cut today or next month," said Annette Beacher, chief Asia-Pacific macroeconomic strategist at TD Securities.
Beacher expects the central bank to pause to assess the impact of the May easing as minutes of the meeting suggested that some members had to be "persuaded" to deliver a cut.
A dealer said the market is positioned for an explicitly dovish policy bias in the central bank's statement and that any surprise omission could propel the Aussie higher.
A Reuters poll shows 51 of 52 economists forecast the RBA to stand pat, but the majority sees another cut by September with interbank futures 0#YIB: implying around a 64 percent chance of an easing by August.
The New Zealand dollar NZD=D4 struggled for traction at$0.6900, from a peak of $0.6965 on Monday.
ANZ Senior Economist Philip Borkin noted investor attention is centred on the RBA then the Reserve Bank of New Zealand's rate decision on Thursday.
"The NZD is currently hostage to wider USD forces as markets once again reassess prospects for Fed tightening," he said.
New Zealand government bonds 0#NZTSY= gained, with yields seven basis points lower at the short end and off nine basis points at the long end of the curve.
Australian government bond futures eased with the three-year bond contract YTTc1 off 1 tick at 98.460. The 10-year contract YTCc1 was down half a tick to 97.8400, having scaled an all-time peak of 97.8700. The 20-year contract YXXc1 was steady at 97.2350.
Yields on 10-year cash bonds AU10YT=RR edged up to 2.2 percent, from a record low of 2.1 percent set on Monday. (Editing by Sam Holmes)