- The aussie is among the fastest-rising currencies on Tuesday.
- The dollar retreats against AUD, NZD and CAD, but remains firm against the European majors.
- AUD / USD rise only limited by rise in Treasury yields.
AUD / USD is rising Tuesday for the second day in a row, with the aussie among the best performing currencies on Tuesday, following the meeting of the Reserve Bank of Australia (RBA). The pair surpassed 0.7100, reaching highs since last Thursday.
AUD bounces, dollar loses steam
Despite falling against the Aussie, the dollar is rising against currencies such as the euro and the pound, supported by a rise in Treasury yields. The 10-year benchmark rate is 1.44%, after having traded at 1.33% two days ago. This occurs in the absence of economic data, and in anticipation of the Federal Reserve meeting next week.
In the Asian session, the Reserve Bank of Australia (RBA) kept monetary policy unchanged as expected. The rate remained at 0.1% and the purchase program at AUD 4 billion per month, until the February review. The central bank said there is still time to meet the necessary conditions for a rate hike. “If the economy continues to recover, we believe the RBA will cut the buying program again in February,” say BBH analysts.
The RBA meeting and the good tone in the equity markets are making the AUD one of the fastest rising currencies on Tuesday. The positive data from China, with higher than expected growth in exports and imports in November, together with liquidity injection measures, help the appetite for risk and the AUD / USD. The pair climbed to 0.7107, the highest since December 2 and ahead of the American session remains firm above 0.7100.
Technical levels
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