Forex News: Australian Dollar Rises After RBA Rate Decision

Australian Dollar Rises After RBA Rate Decision

(RTTNews) - The Australian dollar strengthened against other major currencies in the Asian session on Tuesday, after the Reserve Bank of Australia or the RBA maintained rates on hold and markets anticipated the U.S. Federal Reserve's policy meeting later this week.

The Reserve Bank of Australia maintained interest rates at 3.6 percent for a third consecutive month as widely anticipated, while cautioning that inflation may continue to rise and reiterated that price risks have "tilted to the upside."

At a news conference, RBA Governor Michele Bullock stated that additional rate reductions were not required.

Investors await the Federal Reserve's interest-rate decision on Wednesday, where the U.S. central bank is broadly expected to deliver a 25 basis-point rate cut despite existing divisions with the committee.

Traders remain anxious about the Federal Reserve's future easing pace, given conflicting trends of a cooling job market and sticky inflation, as well as gaps in the data from the government shutdown.

In the Asian trading today, the Australian dollar rose to nearly a 6-month high of 1.7515 against the euro, from an early 4-day low of 1.7624. The aussie may test resistance around the 1.74 region.

Against the yen and the Canadian dollar, the aussie advanced to nearly a 1-1/2-year high of 103.79 and a 4-day high of 0.9205 from early lows of 101.51 and 0.9154, respectively. If the aussie extends its uptrend, it is likely to find resistance around 105.00 against the yen and 0.93 against the loonie.

Against the New Zealand and the U.S. dollars, the aussie edged up to 1.1488 and 0.6649 from an early 5-day low of 1.1438 and a 4-day low of 0.6608, respectively. The next possible upside target for the aussie may test resistance near 1.15 against the kiwi and 0.67 against the greenback.

Looking ahead, U.S. NFIB small business optimism for November, U.S. ADP weekly employment data, U.S. Redbook report and U.S. leading index for September are due to be released in the New York session.

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