The Australian dollar showed mixed trading against its major opponents ahead of the Reserve Bank of Australia's policy making meeting. While, the aussie slipped to a 4-day low against the US dollar and the Japanese yen it jumped to a 4-day high against the euro.
Traders are divided over whether the Reserve Bank of Australia (RBA) will opt to slash interest rates by 25 to 50 basis points, or hold rates at a record low of 3.25 percent. The majority of analysts are expecting the RBA to retain its current target rate of 3.25 percent.
The Australian dollar advanced 13 percent against the US dollar and more than 16 percent against the Japanese yen since the RBA left its key interest rate on hold at 3.25 percent on March 3.
The Australian stock market was trading lower today, snapping three straight sessions of gains, following a modest loss on Wall Street overnight as well as falling commodity prices. In early trading, the benchmark S&P/ASX 200 index was losing 30 points or 0.79% to 3,727, after closing more than half a percent higher on Monday. The broader All Ordinaries index is down 31 points or 0.83% to 3,666.
In economic news, the Australian Industry Group/Housing Industry Association's Performance of Construction index for March registered a reading of 30.4, a gain of 0.9 points from the February reading but still below the 50.0 mark that separated expansion in the sector from contraction.
Pulling back from last week's strong rally, the Australian dollar dropped to a 4-day low of 0.7064 against the US dollar by 9:05 pm ET. On the downside, the aussie is likely to find target near the 0.677 level. The aussie-buck pair closed Monday's New York session at 0.7141.
The Australian dollar dropped to a 4-day low against the Japanese yen also in early Asian trading on Tuesday. Moving away from yesterday's new multi-month high, the aussie slumped to 70.9 by 8:00 pm ET and leveled off thereafter. The aussie-yen pair that closed Monday's North American deals at 72.13 is currently trading near 71.4.
There is no change of rate is expected from the Bank of Japan today when it concludes its two-day monetary policy meeting as its benchmark rate is already lower at 0.10 percent. Traders will instead focus on the actions of the Japanese government to boost the economy.
Japanese government intends to introduce a new stimulus package worth 2 percent or more of gross domestic product, Finance Minister Kaoru Yosano told reporters yesterday. Accordingly, new fiscal spending would exceed 10 trillion yen. Details of the third package are likely to be finalized by April 10.
The aussie jumped to a 4-day high of 1.8776 against the euro before edging down in early Asian trading on Tuesday. The euro-aussie pair is currently trading near 1.883, compared to Monday's North American close of 1.8799.
The aussie has gained around 7 percent against the euro since it reached a 6-week low on March 18. If the aussie ticks up further, 1.864 is seen as the next target level.
Market participants are eagerly waiting for the seasonally adjusted final gross domestic product report from the euro-zone in the upcoming session. Analysts expect the euro-zone economy to contract 1.3 percent annually.
Rebounding from yesterday's multi-month low, the Australian dollar advanced to a 4-day high of 1.2232 against the New Zealand dollar in early Asian trading on Tuesday. This may be compared to Monday's North American session closing value of 1.2144. On the upside, the aussie is likely to find resistance near the 1.228 level.
New Zealand's economic recession probably worsened in the first three months of 2009, according to survey results released today by the New Zealand Institute of Economic Research (NZIER).
The institute's Quarterly Survey of Business Opinion showed a seasonally adjusted net 47 percent of firms reporting decreased business activity. The figure was worse than the 44 percent negative reading recorded for the preceding quarter, and was the lowest since at least 1970.
For comments and feedback: contact email@example.com