By Cecile Lefort and Charlotte Greenfield
SYDNEY/WELLINGTON, April 26 (Reuters) - The Australian dollar slipped on Wednesday for a second consecutive session after underwhelming inflation figures supported expectations of a benign interest rate outlook for months to come.
The Australian dollar AUD=D4 dropped a quarter of a U.S. cent to $0.7517, having briefly popped as high as $0.7557.
Strong support was found at 75 cents, with resistance at the 200-day moving average of $0.7612. The Aussie has lost a full U.S. cent since hitting a peak above 76 cents last week.
It lost some momentum after key measures of core inflation stayed stubbornly short of the Reserve Bank of Australia's (RBA) 2 to 3 percent target band at 1.8 percent. ID:L4N1HY19W
Interbank futures 0#YIB: barely budged, implying investors still saw scant chance of another easing from the RBA in coming months.
"Inflation is not a threat to the domestic economy," said Savanth Sebastian, a senior economist at CommSec.
"The Reserve Bank doesn't need to cut rates again with inflation trending higher, rather than lower... But similarly rate hikes are off the agenda."
The New Zealand dollar NZD=D4 dropped to a two-week low of $0.6932, having shed 1.4 percent so far this week.
The kiwi emerged from the ANZAC day public holiday on Tuesday, which muted trading volumes, as one of the worst-performing major currencies.
The New Zealand dollar was hit particularly hard by a distaste for commodity currencies after U.S. president Donald Trump vowed protectionist moves towards Canadian lumber imports. New Zealand's small, open trading economy is particularly vulnerable to any threats to free trade.
"Commodity currencies are out of favour...still the New Zealand dollar has underperformed," said Jason Wong, currency strategist at BNZ bank, in a research note.
New Zealand government bonds 0#NZTSY= eased, sending yields 2.5 basis points higher at the long end of the curve.
Australian government bond futures eased, with the three-year bond contract YTTc1 off 3 ticks at 98.120. The 10-year contract YTCc1 fell 3.5 ticks to 97.3450, while the 20-year contract YXXc1 slipped 5 ticks to 98.7650. (Editing by Sam Holmes)