Dollar in focus: The Australian and New Zealand dollars remained near recent lows on Tuesday as bonds faced a setback amid diminishing expectations for a US rate cut, leading to broad strength in the greenback.

The Aussie held steady around $0.6492, after slipping 0.4 per cent to a one-month low of $0.6482. 

Meanwhile, the kiwi dollar struggled at $0.5950, slightly above a five-month trough of $0.5940, following a 1.8 per cent decline last month due to concerns about New Zealand's stalling economy prompting potential rate cuts by its central bank.

Both currencies were impacted by unexpected strong US manufacturing data showing the first expansion since September 2022, leading traders to scale back bets on total US rate cuts for the year to 69 basis points, below the Fed's projection of 75 bps. 

The US dollar strengthened against major peers as a result.

Despite positive factory data from China, suggesting a robust start to the year for the world's second-largest economy, Down Under, the Reserve Bank of Australia's March meeting minutes revealed a dovish tone, indicating no consideration for a rate hike in March, with expectations leaning towards a rate cut.

The RBA's announcement of changes in liquidity provision to the banking system did not impact monetary policy but indicated a cautious approach. 

Australian bonds faced pressure, albeit performing better than US Treasuries, with the 10-year bond yield rising 7 basis points to 4.060 per cent on Tuesday, maintaining a notable gap with its US counterpart.

(With Reuters Inputs)