Forex News: Australian Dollar Rises As RBA Bullock's Comments Spur

Australian Dollar Rises As RBA Bullock's Comments Spur RBA Rate-hike Bets

(RTTNews) - The Australian dollar strengthened against other major currencies in the Asian session on Tuesday, as the comments by the Reserve Bank of Australia (RBA) Governor Michele Bullock about the outlook for monetary policy spurred rate-hike bets.

Earlier in the day, the RBA Bullock stated, "Board uncertain if financial conditions are sufficiently restrictive to return inflation to midpoint of target in a reasonable timeframe."

The RBA Bullock warned about growing inflationary pressures amid the protracted conflict in the Middle East.

Bullock pointed out that a number of indicators still suggest that the job market is tight. That conclusion is largely supported by economic data that has been made public since the rate hike in February. She also emphasized that events in the Middle East serve as a reminder of ongoing geopolitical unpredictability, cautioning that a protracted shock would have an adverse effect on world economic activity.

Citing upside inflation risks, the RBA raised its cash rate by 25 basis points to 3.85 percent during the February meeting, leaving the possibility of additional monetary policy tightening.

In the Asian trading today, the Australian dollar rose to a 36-year high of 112.09 against the yen, a 16-year high of 1.1969 against the NZ dollar and a 1-year high of 1.6427 against the euro, from yesterday's closing quotes of 111.65, 1.1942 and 1.6476, respectively. If the aussie extends its uptrend, it is likely to find resistance around 113.00 against the yen, 1.20 against the kiwi and 1.63 against the euro.

Against the Canada and the U.S. dollar, the aussie advanced to 4-day highs of 0.9731 and 0.7123 from Monday's closing quotes of 0.9703 and 0.7093, respectively. The aussie may test resistance around 0.96 against the loonie and 0.72 against the greenback.

Looking ahead, Eurozone CPI data for February is due to be released at 5:00 am ET in the European session.

In the New York session, U.S. LMI logistics managers index for February, U.S. Redbook report and U.S. RCM/TIPP economic optimism index for March are slated for release.

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