By Cecile Lefort and Rebecca Howard
SYDNEY/WELLINGTON, May 23 (Reuters) - The Australian and New Zealand dollars struggled for traction on Monday, after three punishing weeks because of the diverging interest rate outlook for the Antipodean economies and the United States.
The Australian dollar AUD=D4 marked time at $0.7237, having briefly dipped last week below 72 cents for the first time since early March. Resistance was found at $0.7333 and support at $0.7175.
"Gains in equity markets and a bounce in iron ore prices helped AUD keep above $0.72," said Sean Callow, a senior currency strategist at Westpac.
Still, some analysts forecast a retracement all the way to $0.6827 on growing speculation the U.S. Federal Reserve may raise rates in June, giving the U.S. dollar even more strength.
The Aussie is down nearly 5 percent this month with speculative funds cutting long Aussie positions, data from the Commodity Futures Trading Commission. long positions were still around 25,000, suggesting the Aussie had room to fall.
For now, focus will fall on Reserve Bank of Australia (RBA) Governor Glenn Stevens, who is due to address the Trans-Tasman Business Circle on Tuesday, in what will be his first public appearance since the May 3 interest rate cut.
Markets will look for any hint on whether the RBA will cut again as the minutes of the May meeting suggested the move could have been a one-off.
Interbank futures 0#YIB: are fully priced for another easing to a record low of 1.5 percent later this year.
The New Zealand dollar NZD=D4 was unchanged early Monday at $0.6770, from a two-month trough of $0.6710 touched last week. It has shed nearly 3 percent so far this month, partly on expectations the Reserve Bank of New Zealand may cut rates at its policy review of June 9.
A Reuters poll showed the vast majority of economists forecast an easing to an all-time low of 2.0 percent next monthly. lack of New Zealand data means investors will look to the preliminary Markit PMI surveys and comments expected from U.S. Federal Reserve officials later in the global trading day for direction, said ANZ Bank. Domestically the main focus is on the government's budget, due to be presented Thursday.
ANZ tipped the New Zealand dollar to trade in a short term range of $0.6700-$0.6800.
New Zealand government bonds 0#NZTSY= eased a tad across the short end of the curve, up 1 bps, while the long end was unchanged.
Australian government bond futures were mixed, with the three-year bond contract YTTc1 off 1 tick at 98.390. The 10-year contract YTCc1 edged up 1 tick to 97.7100, while the 20-year contract YXXc1 was steady at 97.0850. (Editing by Simon Cameron-Moore)