SYDNEY, July 18 (Reuters) - The Australian dollar held small gains on Tuesday as minutes from the central bank's July policy meeting provided no major surprises on the rate outlook, while the kiwi also steadied after recent losses.

The Aussie was last up 0.2% at $0.6830, after easing 0.3% overnight to as low as $0.6788. It now faces resistance at $0.6895 while support is at the major retracement level of 68 cents.

Minutes of the July policy meeting, released earlier on Tuesday, showed that the Reserve Bank of Australia kept its interest rate steady as policy was clearly restrictive and there was a risk a squeeze on household finances could lead to a sharp downturn and higher unemployment.

Despite sounding slightly dovish and highlighting some key areas of uncertainty, the RBA retained a warning that some tightening may still be required to bring inflation to heel.

"The minutes... are unlikely to sway views about the near-term direction of interest rates," said Adam Boyton, head of Australian economics at ANZ. "While it's possible the Reserve Bank could hike in August, on balance an extended pause at 4.1% is most likely."

Indeed, futures continued to favour a pause in August, with pricing little changed at about 65%, and fully priced in for a quarter-point hike to 4.35% by the end of the year.

The Commonwealth Bank of Australia, in a note to clients, said it sees more downside to the Australian dollar as a global downturn looms, predicting the currency could fall to 64 cents by year-end, before recovering strongly next year.

Across the Tasman sea, the kiwi was fetching $0.6339, after falling 0.7% overnight to a low of $0.6309. Resistance is at $0.6412 while support is around 63 cents.

New Zealand is due to release its second-quarter inflation figures on Wednesday. Economists polled by Reuters expect headline consumer prices to have risen 5.9% in the last quarter, slowing from 6.7% in the first three months of the year, reinforcing widespread market views that interest rates have peaked.

(Reporting by Stella Qiu Editing by Shri Navaratnam)