The Australian dollar has consolidated recent gains as fears over trade tariffs faded for the moment, while a politically-inspired pullback in sterling put a squeeze on short positions.
The Aussie dollar was firm at 74.75 US cents on Tuesday, having touched a three-week peak at 74.84 overnight.
A break of resistance around 74.40 had triggered stop-less bids, with the speculative market short after weeks of selling.
It was aided by a sharp fall in sterling as ministerial resignations threw the British government of Prime Minster Theresa May into turmoil.
The pound had pulled back to $A1.7727, having been as high as $A1.7938 early on Monday.
‘We anticipate the downward pressure on GBP will continue, and intra-day volatility will remain high, as speculation of a ‘no confidence’ vote and leadership challenge mounts,’ said Richard Grace, chief currency strategist at CBA.
At home, the latest NAB business survey showed sales and profits stayed strong in June, though employment intentions eased back a touch.