The Australian dollar depreciated vis-Ã -vis the U.S. dollar today as the Aussie tested bids around the US$ 0.9265 level and was capped around the $0.9405 level. As expected, Reserve Bank of Australia tightened monetary policy overnight, lifting the cash rate target by 25bps to 7.25% - its highest level since the mid 1990s. Inflation remains elevated in Australia and was running at an annualized 3.0% in the December quarter with core inflation around 3.5%. RBA noted, however, that its cumulative rate hikes since mid-2007 have tightened credit conditions significantly and many traders took this as a suggestion the central bank may move to a wait-and-see move. RBA Governor Stevens suggested inflation could rise even further by year end before moderating next year. Data released in Australia overnight saw the current account balance print at â€“A$ 19.3 billion in the three months to December. Also, January retail sales were unchanged m/m. A government forecast estimates Australian commodity exports are expected to rise 30% to a record A$ 189 billion this year. Australian dollar bids are cited around the US$ 0.9120 level. The New Zealand dollar weakened vis-Ã -vis the U.S. dollar as the kiwi tested bids around the US$ 0.7995 level and was capped around the $0.8075 level. Kiwi bids are cited around the US$ 0.7895 level.
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