The Australian dollar depreciated vis-à-vis the U.S. dollar today as the Aussie tested bids around the US$ 0.9265 level and was capped around the $0.9405 level. As expected, Reserve Bank of Australia tightened monetary policy overnight, lifting the cash rate target by 25bps to 7.25% - its highest level since the mid 1990s. Inflation remains elevated in Australia and was running at an annualized 3.0% in the December quarter with core inflation around 3.5%. RBA noted, however, that its cumulative rate hikes since mid-2007 have tightened credit conditions significantly and many traders took this as a suggestion the central bank may move to a wait-and-see move. RBA Governor Stevens suggested inflation could rise even further by year end before moderating next year. Data released in Australia overnight saw the current account balance print at –A$ 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-à-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.