RTTN:Australian Dollar Falls After RBA Lowers Key Policy Rate
(RTTNews) - In Asian trading on Tuesday, the Australian dollar weakened against other major currencies after the Reserve Bank of Australia lowered its benchmark interest rate for the first time since April 2009, saying that growth will moderate and inflation will be close to the bank's target in the coming months.
As expected, the central bank reduced the rate by 25 basis points to 4.5 percent and the new rate will be effective from November 02.
"With overall growth moderate, inflation now likely to be close to target and confidence subdued outside the resources sector, the Board concluded that a more neutral stance of monetary policy would now be consistent with achieving sustainable growth and 2-3 percent inflation over time," the central bank said in a statement.
Recent information suggests the subdued demand conditions and the high exchange rate have contained inflation more recently, notwithstanding continuing sizeable increases in utilities charges, the bank observed.
The Australian dollar that closed yesterday's trading at 1.0533 against the US dollar fell to a 5-day low of 1.0478 in today's Asian deals. The next downside target level for the aussie-greenback pair is seen at 1.040.
The aussie-greenback pair that jumped to an 8-week high of 1.0755 on October 27 has been declining thereafter and lost 2.6 percent thus far.
Against the Canadian dollar, the Australian dollar slipped to a 5-day low of 1.0481, compared to yesterday's close of 1.0540. On the downside, 1.045 is seen as the next target level for the Australian currency.
The Australian dollar has depreciated 1.8 percent against the Canadian dollar since it reached a fresh 14- 1/2 -year high of 1.0669 on October 28.
The Australian dollar that jumped to a fresh 7-week high of 1.3116 against the euro in early Asian deals at 8:25 pm ET declined 0.7 percent thereafter. As of now, the aussie is worth 1.3210 per euro, compared to yesterday's close of 1.3161. If the aussie weakens further, it will test support around 1.330 in near term.
After hitting as high as 83.22 against the yen in today's early Asian deals at 8:10 pm ET, the Australian dollar pulled back. At present, the aussie-yen pair is worth 81.97, down 2.4 percent from near a 3-month high of 84.0 hit in yesterday's Asian deals. The next downside target level for the Australian currency is seen at 81.0. The aussie-yen pair closed yesterday's New York session at 82.34.
The Australian dollar is currently trading at 1.2980 against the New Zealand dollar. This was down 0.8 percent from a 4-day high of 1.3080 hit in early Asian deals. If the aussie slides further, it may target the 1.290 level. At yesterday's close, the aussie-kiwi pair was quoted at 1.3059.
(RTTNews) - Investors now focus on the European session, in which U.K. Nationwide house prices for October, preliminary third quarter GDP, Swiss retail sales for September and the final PMI reports for October from the major European economies are scheduled for release.
Across the Atlantic, the U.S. construction spending for September and ISM manufacturing index for October are due in the New York morning session.
