By Swati Pandey and Charlotte Greenfield
SYDNEY/WELLINGTON, Jan 24 (Reuters) - The Australian and New Zealand dollars touched 2-1/2 month highs on Tuesday as the greenback wallowed on concerns about the impact of U.S. President Donald Trump's protectionist trade stance.
Trump formally withdrew the United States from the Trans-Pacific Partnership trade deal on Monday, distancing America from its Asian allies even as China's influence in the region rises. Australian dollar AUD=D4 rose as far as $0.7609, a level last seen on Nov. 11. The New Zealand dollar NZD=D4 climbed to peak of $0.7265, from as low as $0.7165 on Monday.
"The U.S. dollar market remains very nervous, not only driven by Trump's uncertainties, but very unsure of what additional daunting headlines may lie ahead," said Stephen Innes, senior currency trader at FX and CFD provider OANDA Australia and Asia Pacific.
Investors had been looking to Trump to highlight his plans for fiscal spending, tax cuts and regulatory reforms at his various public addresses in recent days, but he has instead focussed on his "America first" campaign catchphrases. uncertainty has pushed the greenback to near seven-week lows. The Aussie, on the other hand, is up 5.4 percent so far in January and among the best performing major currencies this year.
Locally, attention will veer to inflation data due on Wednesday. Analysts believe CPI picked up a little, but core inflation remained around a record low of 1.5 percent for a second straight quarter. ECONAU
New Zealand also releases inflation data on Thursday which would be closely watched for confirmation that the consumer price index had returned to the central bank's target range. ECONNZ
The Aussie's golden run against the U.S. dollar did not extend to other currencies.
It slipped against its New Zealand cousin AUDNZD=R and was set for its third straight monthly fall. Against the yen AUDJPY , it lost 1.2 percent on Monday to post its worst one-day performance since Dec.19.
It did bounce 0.3 percent against the euro AUDEUR=R , but fell for a third straight session on the British pound AUDGBP=R .
New Zealand government bonds 0#NZTSY= gained, sending yields 0.5 basis points lower at the long end of the curve.
Australian government bond futures followed Treasuries higher, with the three-year bond contract YTTc1 up 3 ticks at 97.99. The 10-year contract YTCc1 added 4.5 ticks to 97.255. (Editing by Kim Coghill)