MW:U.S. dollar slips as Aussie climbs on RBA’s pause
By V. Phani Kumar, MarketWatch
HONG KONG (MarketWatch) — The U.S. dollar fell against the euro Tuesday as investor appetite for risky assets improved, with the Australian currency appreciating after the central bank there decided to leave interest rates unchanged after a series of reductions.
The ICE dollar index DXY -0.08% , a measure of the greenback’s moves against six major global currencies, fell to 82.062 in Tokyo afternoon trade from 82.214 in the U.S. late on Monday.
The WSJ dollar index XX:BUXX -0.15% , which captures the currency’s performance versus a slightly wider basket of rival units, dropped to 72.95 from 73.15.
The dollar’s weakness, which often reflects investors’ willingness to take on more risk, came against the backdrop of widespread gains for Asian equities a day after many of them, led by Chinese stocks, suffered heavy losses. Read Asia Markets.
The euro EURUSD +0.0197% was fetching $1.3046, up from $1.3019. The advance recovered some recent losses for the common currency amid concerns about political uncertainty in Italy and worries over the country’s sovereign credit ratings.
Investors were looking ahead to this week’s European Central Bank meeting for the central bank’s economic outlook and ECB President Mario Draghi’s views on the need for further monetary stimulus.
Overnight in the U.S., Federal Reserve Vice Chair Janet Yellen said the central bank shouldn’t scale back its accommodative policy stance so as to support a stronger economic recovery and growth in employment.
Against the Japanese currency, the euro EURJPY -0.4231% was changing hands for 121.35 yen from ¥121.68, while the U.S. dollar USDJPY -0.4623% was trading at ¥93.10 from ¥93.46.
The Australian dollar, also known as the aussie, appreciated against the greenback after the Reserve Bank of Australia left its benchmark interest rate unchanged at 3%, noting that benign inflationary conditions left it room to ease its policy further, should there be a need. Read more about the RBA’s decision.
The Australian central bank has already cut interest rates by 1.75 percentage points since November 2011.
The aussie AUDUSD +0.3790% was trading at $1.0242, compared with $1.0186.
Among other major currency pairs, the British pound GBPUSD +0.0280% was changing hands for $1.5125, compared with $1.511.
Varahabhotla Phani Kumar is a reporter in MarketWatch's Hong Kong bureau. Follow him on Twitter @MktwKumar.
