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Forex - AUD stronger ahead of RBA's latest cash rate review

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Investing.com -

Investing.com - The Australian dollar edged higher on Tuesday ahead of the Reserve Bank of Australia's latest cash rate decision widely expected to hold steady and in subdued trade with Japanese and South Korean markets closed.

AUD/USD traded at 0.9278, up 0.05%, while EUR/USD held flat at 1.3876.

The RBA's latest cash rate announcement is due at 1430 Sydney (0430 GMT) with expectations for the rate at a record low 2.5% to stay in place.

Before that, Australia's March trade balance is due at 1130 (0130 GMT) and expected to show a trade surplus of A$1.2 billion, matching February.

Overnight, the dollar traded lower though steadily against most major currencies after weak manufacturing numbers out of China sent investors to the yen.

Investors were paying close attention to events unfolding in Ukraine, after conflict between the government and pro-Russian separatists grew more widespread and intensified over the weekend, which weakened the dollar on concerns Washington will get dragged deeper into the chaos and stifle recovery.

Elsewhere, soft output data out of China sparked safe-haven demand for the yen, which came at the greenback's expense.

A final reading of China's HSBC manufacturing purchasing managers' index came in at 48.1 April, down from a preliminary estimate of 48.3 and missing forecasts for an uptick to 48.4. A reading below 50 indicates a contraction.

Supporting the U.S. currency, however, was an upbeat report on the U.S. service sector, which kept the dollar stable throughout the session.

In a report, the Institute of Supply Management said its non-manufacturing purchasing managers' index rose to a five-month high of 55.2 in April, from a reading of 53.1 in March, compared to expectations for a rise to 54.1.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was steady at 79.55.

On Tuesday, the U.S. is to release trade data.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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