Investing.com - The Aussie dollar rose against its U.S. rival during Tuesday’s Asian session, rebounding from a than three-month low seen on Monday, even on speculation the Reserve Bank of Australia could significantly cut interest rates later this year.
In Asian trading Tuesday, AUD/USD rose 0.03% to 1.0259. The pair was likely to find support at 1.0256, the low of February 8 and resistance at 1.0325, the day's high.
The Aussie gained some strength against the greenback even after reports that traders are increasing bets that the Reserve Bank of Australia will pare rates later this year. Some traders are betting on nearly 50 more basis points being shaved from RBA’s key overnight rate, currently 3%. Even a 25 basis point reduction to 2.75% would take Australian interest rates to a record low.
Earlier this month, RBA left rates unchanged at 3%, but some Australian politicians have stepped their weak-dollar rhetoric, intensifying pressure on the central bank to cut rates and stem the tide of the stronger dollar.
Some traders have noted that when AUD/USD slips to 101.70, it is buying opportunity and as the pair encounters stiff resistance at 106, sellers move in. There has even been some speculation that the Aussie could return to parity with the greenback sometime this year.
Following tepid Australian housing data released yesterday, it appears some traders are thinking the door is open for RBA to pare rates, perhaps in the near-term.
On Monday, official data revealed Australian home-loan approvals dropped in December for a third consecutive month. Loans for new homes fell 1.5% in December, more than double the 0.7% November decline.
Approved loans for new residential construction rose 1.2% in December, marking the first increase in that statistic since July. First-time home buyers in Australia comprised less than 15% of the approved loans in December, the data show, one of the weakest levels in months.
Elsewhere, AUD/JPY fell 0.03% to 96.72 while EUR/AUD shed 0.07% to 1.3063. AUD/NZD lost 0.10% to 1.2270.
In Asian trading Tuesday, AUD/USD rose 0.03% to 1.0259. The pair was likely to find support at 1.0256, the low of February 8 and resistance at 1.0325, the day's high.
The Aussie gained some strength against the greenback even after reports that traders are increasing bets that the Reserve Bank of Australia will pare rates later this year. Some traders are betting on nearly 50 more basis points being shaved from RBA’s key overnight rate, currently 3%. Even a 25 basis point reduction to 2.75% would take Australian interest rates to a record low.
Earlier this month, RBA left rates unchanged at 3%, but some Australian politicians have stepped their weak-dollar rhetoric, intensifying pressure on the central bank to cut rates and stem the tide of the stronger dollar.
Some traders have noted that when AUD/USD slips to 101.70, it is buying opportunity and as the pair encounters stiff resistance at 106, sellers move in. There has even been some speculation that the Aussie could return to parity with the greenback sometime this year.
Following tepid Australian housing data released yesterday, it appears some traders are thinking the door is open for RBA to pare rates, perhaps in the near-term.
On Monday, official data revealed Australian home-loan approvals dropped in December for a third consecutive month. Loans for new homes fell 1.5% in December, more than double the 0.7% November decline.
Approved loans for new residential construction rose 1.2% in December, marking the first increase in that statistic since July. First-time home buyers in Australia comprised less than 15% of the approved loans in December, the data show, one of the weakest levels in months.
Elsewhere, AUD/JPY fell 0.03% to 96.72 while EUR/AUD shed 0.07% to 1.3063. AUD/NZD lost 0.10% to 1.2270.