The Australian dollar weakened against other major currencies in the Asian session on Tuesday, after Australia’s central bank decided to leave its key interest rate unchanged at a record low, as widely expected.
The board of the Reserve Bank of Australia, governed by Philip Lowe, maintained the cash rate at 1.50 percent. The bank had reduced the rate by 25-basis points each in August and May last year.
“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,” the bank said in a statement.
In other economic news, data from the Australian Industry Group showed that the manufacturing sector in Australia continued to expand in July, and at a faster rate, with a Performance of Manufacturing Index score of 56.0. That’s up from 55.0 in June,
Data from the ANZ bank and Roy Morgan Research showed that Australia’s consumer confidence improved for the second straight time during the week ended July 30, reaching its highest level since late February. The consumer confidence index climbed to 118.4 from 115.1 in the preceding month.
Monday, the Australian dollar showed mixed trading against its major rivals. While the aussie fell against the yen, the euro and the NZ dollar, it held steady against the U.S. dollar and the Canadian dollar.
In the Asian trading, the Australian dollar fell to 0.7996 against the U.S. dollar and 88.12 against the yen, from an early 5-day high of 0.8043 and a 4-day high of 88.70, respectively. If the aussie extends its downtrend, it is likely to find support around 0.78 against the greenback and 86.00 against the yen.
Against the euro, the aussie dropped to 1.4787 from an early high of 1.4702. On the downside, 1.50 is seen as the next support level for the aussie.
The aussie edged down to 0.9991 against the Canadian dollar, from an early near 2-week high of 1.0048. The aussie is likely to find support near the 0.98 region.
Meanwhile, the Australian dollar recovered to a 6-day high of 1.0699 against the NZ dollar, from an early low of 1.0647. The aussie may test resistance near the 1.08 region.
Looking ahead, PMI reports from major European economies for July and Eurozone GDP data for the second quarter are due to be released later in the day.
In the New York session, Markits’ U.S. and Canada PMI reports for July, U.S. personal income and spending data for June, U.S….