The Australian dollar weakened against the other major currencies in the Asian session on Tuesday after the minutes of the Reserve Bank of Australia March monetary policy meeting signaled the possibility of cutting the benchmark interest rate again.
The members of the RBA monetary policy board decided finally to take no action in order to give the economy more time to adjust to the 25-basis point rate cut implemented in February, the minute showed.
The bank said that it was appropriate to hold rates steady after easing in the previous month and said that the board will asses the need for further easing at forthcoming meetings, to foster sustainable growth in demand and to reach the inflation target.
“Members saw benefit in allowing some time for the structure of interest rates and the economy to adjust to the earlier change. They also saw advantages in receiving more data to indicate whether or not the economy was on the previously forecast path,” the minutes said.
At the meeting, the central bank kept its benchmark interest rate steady at 2.25 percent.
Monday, the Australian dollar showed mixed trading against the other major currencies. While the U.S dollar, the yen and the euro held steady, it rose against the Canadian dollar. Against the NZ dollar, the aussie fell.
In the Asian trading today, the Australian dollar fell to nearly a 2-week low of 1.0332 against the NZ dollar, from yesterday’s closing quote of 1.0359. If the aussie extends its downtrend, it is likely to find support around the 1.02 area.
The aussie slipped to a 5-day low of 1.3871 against the euro, from yesterday’s closing value of 1.3824. On the downside, 1.43 is seen as the next support level for the aussie.
Against the U.S. and the Canadian dollars, the aussie dropped to 4-day lows of 0.7612 and 0.9728 from yesterday’s closing quotes of 0.7637 and 0.9755, respectively. The aussie is likely to find support around 89.20 against the greenback and 0.95 against the loonie.
The aussie edged down to 92.42 against the yen. At yesterday’s close, the aussie was trading at 92.67 against the yen. The aussie is now poised to seek support near the 89.20 region.
Looking ahead, Japan leading index for January is due to be released at 1:00 am ET.
In the European session, the German ZEW economic sentiment index for March, final Eurozone CPI for February and employment data for fourth-quarter are slated for release.
In the New York session, U.S. building permits and housing starts data for February and Canada manufacturing sales data for January are set to be published.
U.S. Federal Reserve’s Federal Open Market Committee will start its two-day meeting on interest rates.