RTTN:Australian Dollar Falls As RBA Holds Cash Rate Steady
The Australian dollar drifted lower on Tuesday after the Reserve Bank of Australia kept the benchmark cash rate unchanged at 2.75 percent. However, the central bank stated that the inflation outlook afforded scope for further monetary easing.
The decision was in line with economists forecasts.
The Reserve Bank Board judged that the easier financial conditions now in place will contribute to the strengthening of growth over time, consistent with achieving the inflation target.
The Board also noted that the recent national accounts data confirmed that the economy has been growing a bit below trend over the recent period.
The aussie declined to 0.9174 against the greenback, heading towards Monday's lowest level of 0.9107 in nearly 3 years. The next probable support for the aussie-greenback pair lies around the 0.90 level.
The aussie weakened to 1.4243 against the euro and further bearish extension of the aussie below the 1.427 zone will help it to hit its lowest level in a week. On the downside, the aussie may seek support surrounding around the 1.44 area.
The aussie reached as low as 91.39 against the yen, pulling away from a more than 2-week high of 92.23 set on Monday. The aussie is poised to test support around the 90.00 level.
The monetary base in Japan spiked 36.0 percent year-over-year in June, the Bank of Japan said today, standing at 163.537 trillion yen.
This follows the 31.6 percent surge in May.
The aussie touched 0.9636 against the Canadian currency, a 0.8 percent depreciation from a high of 0.9710 hit in early Asian deals. If the aussie continues its bear run, it may face support around the 0.95 level.
The Australian unit touched 1.1765 against the NZ dollar, a level not seen since June 20 and was down by 1.6 percent in a week. A continuation of the bear move for the aussie will see it seeking support around the 1.165 level.
The Eurozone PPI for May is due in the European session.
At 10:00 am ET, U.S. factory orders data for May is set for release.
