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Forex News: Australian Dollar Strengthens As RBA Cuts Rate Amid

Australian Dollar Strengthens As RBA Cuts Rate Amid Coronavirus Worries

03/03/2020 - 01:15:00 (RTTNews)

(RTTNews) - The Australian dollar appreciated against its major counterparts in the Asian session on Tuesday, after the Reserve Bank of Australia lowered its key interest rate to a fresh low to support the economy in response to the coronavirus outbreak.

The board of the Reserve Bank of Australia, governed by Philip Lowe, decided to cut the cash rate by a quarter-point to a record 0.50 percent.

Policymakers observed that the global outbreak of the coronavirus is expected to delay progress in Australia towards full employment and the inflation target.

"The Board therefore judged that it was appropriate to ease monetary policy further to provide additional support to employment and economic activity," the bank said.

The board reiterated that it is prepared to ease monetary policy further to support the Australian economy.

The aussie advanced to 0.6566 against the greenback, from a low of 0.6510 seen at 8:45 pm ET. The aussie is seen finding resistance around the 0.70 mark.

The aussie was up against the euro at 1.6965. The pair had finished Monday's deals at 1.7021. Next key resistance for the aussie is likely seen around the 1.60 level.

The aussie bounced off to 70.91 against the yen, after falling to 70.30 at 10:30 pm ET. The aussie is likely to face resistance around the 72.5 region, if it gains again.

Data from the Cabinet Office showed that Japan's consumer confidence fell in February.

On a seasonally adjusted basis, the consumer confidence index decreased to 38.4 in February from 39.1 in January and December. Economists had expected a score of 38.3.

The aussie was trading higher at 0.8752 against the loonie and 1.0462 against the kiwi, compared to 4-day lows of 0.8684 and 1.0409, respectively hit in early deals. Immediate resistance for the aussie is possibly seen around 0.94 against the loonie and 1.06 against the kiwi.

Looking ahead, at 1:45 am ET, Swiss GDP data for the fourth quarter is due out.

U.K. construction PMI for February and Eurozone flash CPI for the same month, PPI and jobless rate for January are scheduled for release in the European session.

At 2:50 pm ET, Federal Reserve Bank of Cleveland President Loretta Mester will deliver a speech about the economic outlook and monetary policy at the Society of Professional Economists Annual Dinner, in London.

For comments and feedback: contact editorial@rttnews.com

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