By Cecile Lefort and Swati Pandey
SYDNEY/WELLINGTON, Nov 3 (Reuters) - The Australian and New Zealand dollars edged higher on Tuesday as speculation the Reserve Bank of Australia (RBA) could resume cutting interest rates waned.
The outcome of the RBA'S monthly policy meeting is due at 0330 GMT and interbank futures 0#YIB: imply a 30 percent chance of a easing to a record low of 1.75 percent, from a 38 percent chance on Monday.
"With the weak China data and the recent tepid inflation data, one would think the chance of a move should be greater than that," said Stephen Innes, a senior trader at FX/CFD firm OANDA Australia and Asia Pacific. Yet he noted that RBA Governor Glenn Stevens has always been a "reluctant" cutter.
The vast majority of economists forecast the RBA to keep rates on hold.
If there is no move, the Aussie could still be undermined should the RBA adopt an easing bias in its policy statement.
Were the RBA to do neither, the Aussie could test resistance between $0.7260 and $0.7300.
The Australian dollar rose to $0.7162, from $0.7135 early, having pulled away from a recent three-week low of $0.7067. Support was found around $0.7117 with resistance near $0.7210.
The New Zealand dollar NZD=D4 was dragged higher to $0.6760, from $0.6733 early. It jumped 5.7 percent in October, the largest monthly gain in two years. Support was found at $0.6620.
Investors remained cautious ahead of Wednesday's global dairy trade auction (GDT).
"The GDT auction may take some of the shine off the NZD, with a range of factors suggesting the auction could see more of a pullback in prices than implied by the circa 5 percent decline in NZX futures," ANZ said in a morning note.
Weaker prices would also add to speculation the Reserve Bank of New Zealand (RBNZ) will deliver another 25 basis points at its December meeting.
New Zealand government bonds had a soft tone, with yields 3 basis points higher.
Australian government bond futures also eased, with the three-year bond contract off 3 ticks at 98.190. The 10-year contract shed 3.5 ticks to 97.3150, while the 20-year contract was down 2 ticks at 96.7750.