Investing.com - The Australian dollar is trading higher against its U.S. rival in Asia on Tuesday ahead of the Reserve Bank of Australia’s latest monetary policy meeting.
In Asian trading Tuesday, AUD/USD is higher by 0.27% at 1.0451. The pair was likely to find support at 1.0364, the low of March 21 and resistance at 1.0482, last Wednesday's high.
Recent commentary from RBA shows the central bank is pleased with how a spate of rate cuts starting in late 2011 that went through the end of 2012 are helping the world’s 12th-largest economy. While RBA’s recent bias has been towards easing, the central bank kept rates unchanged following its last two policy meetings.
Australia’s overnight cash rate currently stands at 3%, near a record low for the country, but still one of the highest rates in the developed world.
RBA is preparing for a slowdown in the Australian economy this year due to declining investment in the mining sector. Analysts and economists widely expect Australia’s mining boom will peak later this year, leaving other sectors, such as construction and retail to pick up the slack. That has yet to happen in earnest, though it is worth noting Australia has gone 21 straight years without a recession.
Despite the weak outlook for the country’s mining sector and already slack commodities demand, traders have progressively reduced bets in recent weeks that RBA will lower rates today.
On Monday, the International Monetary Fund said in a report that global central banks are holding less U.S. dollars and Japanese yen, but have boosted their holdings of the Aussie and the Canadian dollar. Australia and Canada both have AAA credit ratings, something the U.S., Japan and much of the euro zone cannot say.
Elsewhere, AUD/JPY rose 0.02% to 97.21 while AUD/NZD is up 0.06% at 1.2461.
In Asian trading Tuesday, AUD/USD is higher by 0.27% at 1.0451. The pair was likely to find support at 1.0364, the low of March 21 and resistance at 1.0482, last Wednesday's high.
Recent commentary from RBA shows the central bank is pleased with how a spate of rate cuts starting in late 2011 that went through the end of 2012 are helping the world’s 12th-largest economy. While RBA’s recent bias has been towards easing, the central bank kept rates unchanged following its last two policy meetings.
Australia’s overnight cash rate currently stands at 3%, near a record low for the country, but still one of the highest rates in the developed world.
RBA is preparing for a slowdown in the Australian economy this year due to declining investment in the mining sector. Analysts and economists widely expect Australia’s mining boom will peak later this year, leaving other sectors, such as construction and retail to pick up the slack. That has yet to happen in earnest, though it is worth noting Australia has gone 21 straight years without a recession.
Despite the weak outlook for the country’s mining sector and already slack commodities demand, traders have progressively reduced bets in recent weeks that RBA will lower rates today.
On Monday, the International Monetary Fund said in a report that global central banks are holding less U.S. dollars and Japanese yen, but have boosted their holdings of the Aussie and the Canadian dollar. Australia and Canada both have AAA credit ratings, something the U.S., Japan and much of the euro zone cannot say.
Elsewhere, AUD/JPY rose 0.02% to 97.21 while AUD/NZD is up 0.06% at 1.2461.