By Cecile Lefort and Rebecca Howard
SYDNEY/WELLINGTON, Dec 2 (Reuters) - The Australian dollar held near seven-week highs on Wednesday after data showed solid economic growth last quarter, supporting views that interest rates will not be cut in the near term.
The Australian dollar climbed as far as $0.7345, having surged a full cent on Tuesday. It was last at $0.7314, having risen 1.6 percent in three sessions.
The currency touched a five-month peak against the euro and pound, while it powered to its highest since August on the yen.
The local dollar got a leg up after data showed Australia's economy grew a brisk 0.9 percent in the third quarter, marking a remarkable 24th year without a recession.
Annual growth of 2.5 percent exceeded most developed nations and beat forecasts of 2.4 percent.
"Overall the Reserve Bank is likely to be encouraged by the latest result although there is still a long way to go to see annual growth back at trend levels," said Savanth Sebastian, an economist CommSec.
The central bank kept rates at 2.0 percent at its monthly policy meeting on Tuesday for a seventh month, citing signs activity was picking up, helped by past cuts and a low local currency.
While it appeared in no rush to cut again, the Reserve Bank of Australia (RBA) kept an easing bias.
"The risks still lie with a further rate cut in early 2016 if activity levels don't lift further from here," said CommSec's Sebastian.
Interbank futures slightly lengthened the odds of another rate cut from the RBA, implying a 28 percent chance of a move by March, from 34 percent before the data.
The New Zealand dollar rose to a one-month peak of $0.6690, buoyed by rising global dairy prices. It was last at $0.6663.
Global dairy prices bounced after three consecutive falls at a fortnightly auction held early Wednesday morning, although analysts warned any long-term recovery would likely be slow amidst high global supply.
"At present, NZD/USD has slipped above the downtrend formed by the May and October peaks (at 0.6669), but faces strong resistance at 0.6700 and 0.6730. Momentum suggests these will be tested," BNZ analyst Raiko Shareef said in a research note.
New Zealand government bonds gained, sending yields down 4.5 basis points.
Australian government bond futures were mixed as the yield curve flattened. The three-year bond contract was steady at 97.890, while the 10-year contract added 4 ticks to 97.1700. The 20-year contract gained 4.5 ticks to 96.6850.
The spread between three AU3YT=RR and 10-year AU10YT=RR cash bonds shrank to 68 basis points, the thinnest since April. (Editing by Richard Pullin)