By Cecile Lefort and Rebecca Howard
SYDNEY/WELLINGTON, Dec 9 (Reuters) - The Australian and New Zealand dollars were under pressure for the second consecutive session on Wednesday after a brutal selloff in oil and commodities saw speculators add to already bearish positions.
The Australian dollar held at $0.7229, having briefly dipped below 72 U.S. cents overnight. It has lost around a cent and a half since Friday when it hit a three-month peak. Support was found at $0.7186.
The Aussie and Kiwi have been caught up in the commodity currency block downdraft that has hammered the Canadian dollar and the Norwegian Crown.
Dealers suspect the run on commodities could end soon, given the heavy selling. The focus will then shift to next week's Federal Reserve policy review, where a U.S. interest rate hike is considered almost a done deal.
Immediate focus is on China's inflation data and a weak result would only add to worries about global deflation.
The New Zealand dollar NZD=D4 was relatively unchanged at $0.6637, having shed 1.6 percent so far this week. Uncertainty over whether the Reserve Bank of New Zealand (RBNZ) would cut interest rates on Thursday also kept investors wary.
Economists expect the RBNZ to cut the official cash rate by a quarter percentage point to 2.50 percent. Market pricing is also inching higher, with the overnight index swap curve now pricing a 62 percent chance of a cut, according to Stuart Ive, private client manager for OM Financial.
In the event it does cut there will likely be a "knee-jerk step down in the Kiwi given it is far from fully priced," said Wellington-based BNZ FX Strategist Kymberly Martin. The extent of any pullback will be influenced by what the central bank says in the accompanying statement, she added.
In the other direction, the RBNZ could disappoint New Zealand dollar bears by either not moving or by cutting and issuing guidance that further easing is unlikely, said Auckland-based Westpac Bank Senior FX Strategist Imre Speizer.
"The former would see NZD/USD soar, while the latter would push it moderately higher," he said.
New Zealand government bonds were mixed with very little change across the curve.
Australian government bond futures were quiet, with the three-year bond contract steady at 97.870. The 10-year contract was also unchanged at 97.1250, while the 20-year contract shed 1.5 ticks to 96.6050. (Editing by Shri Navaratnam)