Investing.com - The Aussie held gains in Asia Tuesday as the Reserve Bank of Australia's latest interest rate decision held steady as expected.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies,eased 0.06% to 101.61. AUD/USD rose 0.34% to 0.7606 while USD/JPY changed hands at 113.93, up 0.04%.
The RBA interest rate decision held at a record low 1.50%, with the market also focused on FX reserves from China, tentatively scheduled for later in the day.
Overnight, the dollar advanced against a basket of major currencies on Monday, as investors weighed the prospect of a March rate hike while the euro sunk more than 0.4% amid uncertainty over the outcome of the French presidential elections.
Despite the lack of top-tier economic data, market moves in the greenback continued to be fueled by increased expectations that the Federal Reserve will increase interest rates at its next meeting on March 14-15 with U.S. jobs data at the end of the week expected to point to a slam dunk on a rate hike, or not.
Federal Reserve Chair Janet Yellen said on Friday, she expected a gradual increase in interest rates this year and hinted that should U.S. economic data come in as expected, then further monetary tightening "would likely be appropriate" at the Fed's policy meeting in March.
According to Investing.com’s Fed rate monitor tool, nearly 90% of traders expect a rate hike in March, compared to just under 80% last Friday.
Meanwhile, uncertainty concerning the outcome of the French presidential elections weighed on the euro, after former French Prime Minister Alain Juppe, announced Monday he would not seek the country’s presidency. This is viewed as a boon for anti-European candidate Marine Le Pen.