By Saumya Vaishampayan, MarketWatch

NEW YORK (MarketWatch) -- The U.S. dollar fell against the Australian dollar Tuesday as investors looked ahead to Australian first-quarter inflation data that could provide more evidence for a rate hike from the country's central bank.

First-quarter inflation data for Australia are due at 9:30 p.m. Eastern Tuesday. Investors are expecting the consumer-price index to increase 0.8% in the period for an annual increase of 3.2%, according to a Wall Street Journal survey. "That would be a pretty big jump in CPI, putting annual inflation above the RBA's 2% to 3% target range," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange.

The Australian economic data, including recent employment and retail-sales data, are "starting to paint a picture of an RBA that is likely to raise rates in the months ahead," he said.

The Australian dollar (AUDUSD) rose to 93.66 U.S. cents from 93.33 U.S. cents late Monday, hovering below its high for the year.

Investors also paid attention to comments from Australian Treasurer Joe Hockey about how the central bank's switch to a more neutral stance on monetary policy could exert upward pressure on the Australian dollar, which will make it more difficult to manage the economy, according to the Australian Financial Review.

The New Zealand dollar (NZDUSD) rose to 85.99 U.S. cents from 85.73 U.S. cents late Monday. New Zealand's central bank is likely to raise rates at its meeting later this week, said Esiner. The Reserve Bank of New Zealand hiked its key rate by 25 basis points to 2.75% in March.

Other pairs saw limited movement Tuesday amid a lack of major economic data. There are no Federal Reserve speeches scheduled this week.

The euro (EURUSD) rose to $1.3805 from $1.3793 late Monday.

U.S. existing-home sales fell 0.2% last month to an annual rate of 4.59 million. Economists had expected an annual rate of 4.55 million, according to a MarketWatch poll. Separately, home prices rose 0.6% in February and gained 6.9% from a year earlier, the Federal Housing Finance Agency said Tuesday.

The ICE dollar index (DXY), which pits the dollar against six rivals, was at 79.891 versus 79.957 late Monday. The WSJ Dollar Index , which measures the greenback against a broader basket of rivals, was at 73.06 versus 73.10.

U.S. Vice President Joe Biden said Tuesday the U.S. is preparing another round of economic sanctions against Russia unless it pulls back from the Ukrainian border. "What is noteworthy is how complacent markets are to geopolitical risk," said Camilla Sutton, chief foreign-exchange strategist at Scotiabank, in a note.

The dollar (USDJPY) was flat at Yen102.60 from late Monday. The British pound (GBPUSD) rose to $1.6826 from $1.6802 late Monday.

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