The Australian dollar strengthened on Tuesday after the Reserve Bank of Australia kept interest rates on hold and hinted it was in no hurry to ease monetary policy further on signs of reasonably strong economic growth.
Sterling recovered further from three-week lows versus the dollar set on Monday following two newspaper polls on Tuesday that showed Britons narrowly favor remaining in the European Union. The results were in contrast to surveys released on Monday which showed more voters favored leaving the EU.
The dollar hovered near four-week lows against a basket of currencies as traders speculated when the Federal Reserve may raise interest rates in the wake of comments from Fed Chair Janet Yellen on Monday and a poor May jobs report on Friday.
The RBA as expected kept the cash rate at a record low 1.75 percent, after cutting last month for the first time in a year.
"It suggests a patient RBA. It doesn't mean an immediate cut in rates following the one in May," said Thierry Albert Wizman, global interest rates and currencies strategist at Macquarie Limited in New York.
Many traders were disappointed that the RBA statement offered no hints on further easing, which led them to exit earlier bets on an imminent rate cut, sending the Aussie higher.
The Aussie was the biggest gainer among major currencies, hitting $0.7458, its highest since May 6. It rose nearly 1 percent against the yen and the euro.