The Australian dollar climbed against its major counterparts in the Asian session on Tuesday, after the Reserve Bank of Australia left its key interest rate unchanged at a record low and said it expects the economy to grow a little faster this year than last year.
The board of the Reserve Bank of Australia, governed by Philip Lowe, maintained the cash rate at 1.50 percent.
The bank noted that the low level of interest rates is continuing to support the Australian economy.
“Taking account of the available information, the Board judged that holding the stance of monetary policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time,” according to the accompanying statement.
Further underpinning the currency was risk appetite, as concerns about a potential global trade war eased following news that U.S. President Donald Trump faced mounting pressure from political allies to reconsider his decision to impose tariffs on steel and aluminum imports.
Trump has indicated that the tariffs on steel and aluminum would be removed if the U.S. negotiates a “new & fair” NAFTA agreement.
In the economic news, data from the Australian Bureau of Statistics showed that Australia retail sales rose a seasonally adjusted 0.1 percent on month in January, coming in at A$26.263 billion. That missed expectations for an increase of 0.4 percent following the 0.5 percent contraction in December.
Separate report showed that the current account deficit in Australia came in at a seasonally adjusted A$14.024 billion in the fourth quarter of 2017. That missed forecasts for a shortfall of A$12.2 billion following the downwardly revised A$11.013 billion deficit in the three months prior.
The aussie exhibited mixed performance against its major counterparts on Monday. While it held steady against the greenback and the euro, it rose against the yen and the kiwi.
The aussie appreciated to a 4-day high of 1.5847 against the euro, up by 0.3 percent from a low of 1.5893 hit at 7:30 pm ET. The pair was worth 1.5885 when it closed deals on Monday. Continuation of the aussie’s uptrend may see it challenging resistance around the 1.53 region.
The aussie that ended Monday’s trading at 0.7764 against the greenback, strengthened to a 6-day high of 0.7792. On the upside, 0.79 is seen as the next resistance level for the aussie.
The aussie added 0.5 percent to hit a 5-day high of 82.89 against the yen, from Monday’s closing value of 82.46. The aussie is poised to find resistance around the 84.5 level.
The aussie climbed to 1.0107 against the loonie, its strongest since June 2017. This marks a 0.4 percent appreciation from yesterday’s closing quote of 1.0065. It is likely to test resistance around the 1.02 region.
The aussie advanced to a 5-day high of 1.0766 against the kiwi at 7:15 pm ET and moved sideways since then. The pair was valued at 1.0743 at yesterday’s close.
Swiss CPI and German construction PMI for February are due in the European session.
In today’s events, at 7:30 am ET, New York Fed President William Dudley speaks about the economic impact of the 2017 hurricanes at the United States Virgin Islands Nonprofit Leaders Breakfast Roundtable in St. Thomas.
U.S. factory orders and durable goods orders for January, as well as Canada Ivey PMI for February are set for release in the New York session.