By Swati Pandey and Charlotte Greenfield
SYDNEY/WELLINGTON, May 15 (Reuters) - The Australian dollar stepped back on Tuesday as the country's central bank signalled it would keep rates steady for some time while the New Zealand currency hit another six-month low as the greenback inched up amid hopes of easing global trade tensions.
The Australian dollar AUD=D4 was last at $0.7523 from a two-week high of $0.7568 touched on Friday.
The Reserve Bank of Australia (RBA) released minutes of its May policy meeting on Tuesday, which showed it saw scant reason to lift rates as inflation and wage growth remained subdued. RBA inserted a new line in the minutes saying "it would be appropriate to hold the cash rate steady and for the Reserve Bank to be a source of stability and confidence."
Analysts said the RBA may be trying to signal a steady policy path at a time when the quasi-judicial Royal Commission inquiry was unearthing years of malpractice and criminal behaviour at the country's largest financial firms. credit, including availability and demand, remains a focus for the monetary authorities," economists at National Australia Bank said in a note.
"Tomorrow's wage price index and Thursday's labour force will provide another update on the inflation and labour market outlook. We doubt that Q1 wages will be a compelling data point."
Wednesday's data will likely show first-quarter wage growth stubbornly stuck near all-time lows at 2.1 percent, even as brisk job gains are expected on Thursday.
In New Zealand, the kiwi dollar NZD=D4 slipped 0.2 percent on Tuesday to $0.6897, a level not seen since mid-December.
"The New Zealand dollar remains on the back foot and is again eyeing up a test of the 0.69 level as the USD staged a modest comeback and kiwi eyes up downside levels on a number of crosses," said ANZ economists in a research note.
Prospects of a thaw in U.S.-China trade tensions supported the U.S. dollar as President Donald Trump pledged to help Chinese telecom company ZTE Corp (HK:0763) "get back into business, fast." The comments on Sunday came ahead of a second round of trade talks between U.S. and Chinese officials this week. Zealand analysts will be watching a fortnightly dairy auction due on Wednesday. The other big event for the country is the new centre-left Labour government's first annual budget on Thursday.
Labour's plans to pour money into social services and pay down debt a little more slowly than the previous government have been widely flagged, likely avoiding any dramatic fallout for the currency. Zealand government bonds 0#NZTSY= eased, sending yields one basis point higher towards the long end of the curve.
Australian government bond futures slipped, with the three-year bond contract YTTc1 down 4.5 ticks at 97.765. The 10-year contract YTCc1 dipped 5.5 ticks to 97.160. (Editing by Sam Holmes)