By Wayne Cole
SYDNEY, July 23 (Reuters) - The Australian and New Zealand dollars drifted lower on Tuesday as a dearth of economic data left investors with little to do but second guess the prospects for policy easing in the United States and Europe.
The Aussie dollar AUD=D3 eased back to $0.7027, after topping out at a three-month peak of $0.70825 last week. Support now lies around $0.7020 and $0.6995.
The kiwi NZD=D3 dipped to $0.6739 and away from a four-month high of $0.6789 hit on Friday. It has chart support around $0.6730.
The currency was pressured in part by news the Reserve Bank of New Zealand (RBNZ) was taking a fresh look at unconventional monetary policy given that it had already cut interest rates to a record low of 1.5%.
Like many central banks, the RBNZ is having to consider policies such as quantitative easing (QE) as inflation remains too low even as rates approach zero.
Markets are wagering the European Central Bank will at least sound dovish at its policy meeting on Thursday, while the Federal Reserve will cut rates by a quarter point next week.
Futures imply an 80% probability the RBNZ will ease again at its meeting on Aug. 7 RBNZWATCH , though the Reserve Bank of Australia (RBA) is seen on hold at 1% for now after cutting in both June and July.
Speaking on Tuesday, RBA Assistant Governor Christopher Kent reiterated the bank was ready to ease "if needed", though he argued it was highly unlikely they would need to resort to QE.
Kent also noted a lower local dollar would help the economy but conceded this was hard to engineer when so many other central banks were also easing.
Another update on policy will come from RBA Governor Philip Lowe, who speaks on inflation and economic welfare on Thursday.
"That should provide some timely nuance to current pricing and understanding of the RBA's tactics and triggers," said Westpac analysts in a note.
"While we see 0.75% as the low in the cash rate, the risks are to the downside."
Markets are fully priced for a reduction to 0.75% by December 0#YIB: , and imply around a 50-50 chance of a further move after that.
Yields on three-year bonds AU3YT=RR were holding at 0.937% and just above all-time lows of 0.883%. The 10-year bond futures contract YTCc1 added 1 tick to 98.6700.
New Zealand two-year bond yields NZ2YT=RR eased to 1.135%, again just above record lows. (Editing by Sam Holmes)