By Swati Pandey and Charlotte Greenfield
SYDNEY/WELLINGTON, Oct 31 (Reuters) - The Australian dollar was largely flat on Monday ahead of a central bank policy meeting this week and amid nervousness about the outcome of the U.S. elections.
The Australian dollar AUD=D4 stood at $0.7601, recovering from a two-week low of $0.7558 hit on Friday.
Broader market sentiment was hit late last week after the U.S. Federal Bureau of Investigation revealed a new probe into the private email use of Democratic nominee Hillary Clinton, days before the voting day. have tended to see Clinton as the candidate of the status quo, while there is greater uncertainty over what a Donald Trump victory might mean for U.S. foreign policy, international trade deals or the domestic economy.
The greenback skid on the news of the FBI probe and edged lower on Monday .DXY , despite stronger-than-expected economic growth data, which bolstered the case for a U.S. interest rate hike by the Federal Reserve.
"Markets, on Friday, demonstrated that they fear Trump as president far more than they fear the Fed," said Ray Attrill, global co-head of FX strategy at the National Australia Bank.
Locally, economists widely expect the Reserve Bank of Australia (RBA) to stay pat on interest rates at its monthly policy meeting on Tuesday. sense is the RBA will continue to view rates as accommodative, but see little to be gained at this stage via a rate cut," said Stephen Innes, senior currency trader at OANDA Australia and Asia Pacific.
"It's been difficult to find a definitive trend on the Aussie of late, and that's unlikely to change with the U.S. election risk starting to froth."
The Aussie has been resilient in the face of U.S. dollar strength in recent weeks, rising more than 4 percent this year helped by a rebound in the prices of iron ore and coal - Australia's biggest exports.
On Monday, the Aussie fared better against its New Zealand cousin AUDNZD=R , rising 0.2 percent. It also gained on the yen AUDJPY= , but barely moved against the euro EURAUD=R and the British pound GBPAUD= .
The New Zealand dollar NZD=D4 slipped 0.2 percent on Monday to $0.7152, continuing to trade in a tight band.
"We need to see a break outside $0.7035-$0.7265 to signal medium-term direction," said Imre Speizer, senior market strategist at Westpac.
Traders will keep an eye on global dairy prices, employment data and the Reserve Bank of New Zealand's (RBNZ) survey of inflation due Wednesday.
New Zealand government bonds 0#NZTSY= gained, sending yields 3.5 basis points lower at the long end of the curve.
Australian government bond futures gained, with the three-year bond contract YTTc1 up 3 ticks at 98.29. The 10-year contract YTCc1 rose 2.5 ticks to 97.67. (Editing by Amrutha Gayathri)