Australia, NZ Dollars Hold Steady as Dollar Languishes

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SYDNEY, May 25 Reuters The Australian and New Zealand dollars were slightly higher against the greenback on Tuesday, with the dollar softer following weakerthanexpected data and as Federal Reserve officials allayed fears of policy tightening.

The Aussie was 0.05 higher at 0.7758, after touching a low of 0.7706 overnight, as China took steps to curtail excessive speculation in iron ore and other commodity markets.

The commodityprice sensitive currency has been trading within its tight range of 0.7635 and 0.7891 since April 14.

Analysts, nevertheless, see the antipodean currency as undervalued relative to the level implied by iron ore prices, Commonwealth Bank strategists said in a note.

In our view, iron ore prices have room to pare back some of this years stellar gains without dragging AUDUSD lower.

Chinas market regulators warned industrial metal companies to maintain normal market order during talks held on the weekend about the significant gains in metals prices this year.

The Chinese government also said last week that it would manage unreasonable price increases for commodities such as copper, coal, steel and iron ore.

The kiwi dollar was 0.11 higher at 0.7223, having also fallen to 0.7158 overnight. Its May peak stands at 0.7304, while support lies around 0.7143 and 0.7116.

The U.S. national activity index reading of 0.24 against expectations above 1, along with dovish comments from Federal Reserve officials, have quashed bets that U.S. rates will rise…

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