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Australian Dollar Rises After RBA Minutes

The Australian dollar strengthened against other major currencies in the Asian session on Tuesday, after the release of hawkish Reserve Bank of Australia’s minutes for the October 2023 monetary policy meeting.

At October monetary policy meeting, the board members considered two options for monetary policy – raising cash rates by 25 basis points or holding steady.

The board of the Reserve Bank of Australia has a low tolerance for a slower return of inflation to target than expected, the minutes of the monetary policy meeting held on October 3 showed.

Any further action on interest rates will depend on the incoming data and how these alter the economic outlook and the evolving assessment of risks, the minutes showed.

In the Asian trading today, the Australian dollar rose to nearly a 3-week high of 1.0771 against the NZ dollar, from yesterday’s closing value of 1.0698. The aussie may test resistance near the 1.09 region.

Against the yen and the euro, the aussie advanced to 5-day highs of 95.20 and 1.6576 from Monday’s closing quotes of 94.81 and 1.6642, respectively. If the aussie extends its uptrend, it is likely to find resistance around 98.00 against the yen and 1.63 against the euro.

Against the U.S. and the Canadian dollars, the aussie advanced to 5-day highs of 0.6367 and 0.8670 from yesterday’s closing quotes of 0.6340 and 0.8631, respectively. On the upside, 0.65 against the greenback and 0.88 against the loonie are seen as the next resistance level for the aussie.

Looking ahead, Eurozone ZEW economic sentiment index for October is slated for release in the European session.

In the New York session, Canada housing starts for September, inflation data for September, retail sales data for September, U.S. industrial and manufacturing production for September, business inventories for August, U.S. NAHB housing market index for October and U.S. Federal budget balance report for September are set to be published.

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