(Add reaction after RBA policy review)
By Cecile Lefort
WELLINGTON, Oct 6 (Reuters) - The Australian dollar regained its poise on Tuesday after the Reserve Bank of Australia (RBA) disappointed bears who had expected a dovish tone.
The Australian dollar rallied nearly half a cent to a two-week high of $0.7122, pulling further away from a 6-1/2-year trough of $0.6892 set last month.
Immediate resistance was found at the Sept. 22 peak of $0.7159, and a break would target the September high of $0.7280.
As expected, the RBA left the cash rate at a record low of 2.0 percent at its monthly policy meeting, where it has been since May. It reiterated the need for an accommodative policy to support borrowing and lending.
Interbank futures 0#YIB: fell, giving a 44 percent chance of a rate cut by December, from 50 before the RBA outcome. They are, however, still fully priced for a quarter-point-cut by early next year. In contrast, only one third of economists polled by Reuters last week expect an easing.
"The statement is fairly neutral. It's certainly not saying a rate cut is around the corner, nor is it pointing to any rate hikes. They see themselves as being comfortably on hold," said Shane Oliver, chief economist at AMP Capital Markets.
The Aussie rallied against the yen and euro, while it bounced off four-month lows against its kiwi cousin.
The New Zealand dollar NZD=D4 was little changed against its U.S. counterpart at $0.6500, near a five-week peak of $0.6532 touched on Monday. Investors were awaiting the outcome of an overnight dairy auction.
"NZX futures predict a 17 percent rise in whole milk powder prices, which should keep the kiwi supported on crosses for now," said Sean Callow, a senior strategist at Westpac.
The kiwi dollar is sensitive to prices of dairy, the country's top export earner.
A private survey showed business confidence fell to four-year lows in the third quarter on concerns over slowing growth in China and a drought.
New Zealand government bonds slipped, sending yields as much as 8 basis points higher on the long end of the curve.
Australian government bond futures fell, with the three-year bond contract off 6 ticks at 98.210. The 10-year contract dropped 5.5 ticks to 97.3650.