The Aussie dollar still edged up 0.3 percent to $0.7162, snapping resistance at $0.7150 and on track for the next chart barrier at $0.7200. The New Zealand dollar firmed 0.4 percent to $0.6752, taking it back toward Monday's top of $0.6766. For bonds, the improvement in risk sentiment nudged prices lower with Australian three-year bond futures off 1.5 ticks at 98.150. The 10-year contract eased 3.5 ticks to 97.6600.
New Zealand government bonds were little changed, with 10-year yields holding at 2.42 percent. The United States and China extended their latest trade talks into Wednesday amid signs of progress on issues including purchases of US farm and energy commodities and increased access to China's markets. There were also report President Donald Trump was keen to get a deal done soon in the hope it would help Wall Street recoup some of the steep losses suffered in recent months.
The optimism outweighed data showing approvals to build new homes in Australia dived a surprisingly sharp 9.1 percent in November to hit the lowest since mid-2013.