SYDNEY, March 2 Reuters The Australian dollar eased on Tuesday as the central bank sought to calm nervous bond markets by recommitting a pledge to keep buying bonds, and reassuring that faster growth will not lead to an early tightening cycle.

The Aussie was 0.12 lower 0.7760 at midday on Tuesday, and down 3 from the 0.8007 threeyear high it reached last week, after the Reserve Bank of Australia RBA left interest rates at historic lows of 01 at its monthly policy meeting.

The current monetary policy settings are continuing to help the economy by keeping financing costs very low, contributing to a lower exchange rate than otherwise, and supporting the supply of credit and household and business balance sheets, the RBA said in its statement.

remains committed to maintaining highly supportive monetary conditions until its goals are achieved…and will not increase the cash rate until actual inflation is sustainably within the 2 to 3 per cent target range.

Australian 10year bond yields, which had spiked to a high of 1.97 on Friday on bets of rate hikes as early as next year before pulling back on Monday, were two basis points higher at 1.69.

Futures on 3year bonds were steady at 99.725 while 10year bond futures were two ticks lower to 98.31. Last weeks dramatic selloff in bonds, which sent threeyear yields as high as 0.188 and threatened to shakeup the RBAs target of 0.1, prompted an aggressive response from the central bank. It made a A3 billion 2.33 billion bond…