By Swati Pandey and Charlotte Greenfield
SYDNEY/WELLINGTON, Oct 18 (Reuters) - The Australian dollar hovered near a one-month high against the British pound after comments by Bank of England policymakers were interpreted as signalling that it will only raise interest rates slowly.
The Bank of England's new deputy governor distanced himself from the central bank's majority view that interest rates probably need to rise soon, and another newcomer said her support for that position was "very contingent on the data". took the comments as a sign that even if the BoE raises rates in November, further increases are unlikely to quickly follow.
That led to a sell-off in sterling across the board. Against the Australian dollar, it slipped to a low of A$1.6790 GBPAUD= from a near four-month high of A$1.7179 touched in late September.
Elsewhere, the Aussie AUD=D4 traded in a narrow range against the U.S. dollar ahead of local jobs data on Thursday.
The Australian dollar held at $0.7850, a tad firmer from Tuesday's $0.7843. The currency had been on an uptrend since early October and went as high as $0.7897 last week.
Investors will have one eye on the labour data with expectations of 15,000 jobs created in September and the unemployment rate steady at 5.6 percent.
Australian employment has blown past expectations since the start of the year, even as the economy runs below potential. Another strong set of numbers will bolster the central bank's confidence about the outlook for growth.
The Reserve Bank of Australia (RBA) has held interest rates at a record low 1.50 percent after last easing more than a year ago.
Across the Tasman, the New Zealand dollar NZD=D4 was subdued after a disappointing auction for dairy, the main export earner.
The kiwi fell to $0.7160, from a two-week high of $0.7217 on Tuesday, which now stands as major chart resistance.
Global dairy prices slipped for the second auction in a row, falling 1 percent. are still waiting for the small nationalist party that holds the balance of power following New Zealand's inconclusive election to announce whether it would support the incumbent National Party or centre-left Labour. there is a greater degree of political clarity, moves higher are going to be difficult," Con Williams, economist at ANZ Bank, said in a note.
New Zealand government bonds 0#NZTSY= gained, sending yields 3 basis points lower.
Australian government bond futures edged higher, with the three-year bond contract YTTc1 up 2 ticks at 97.900. The 10-year contract YTCc1 rose 4 ticks to 97.2500. (Editing by Richard Borsuk)