Image: Reuters Berita 24 English - The Australian dollar climbed on Tuesday after the Reserve Bank of Australia signalled that further rate...
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| Image: Reuters |
Berita 24 English - The Australian dollar climbed on Tuesday after the Reserve Bank of Australia signalled that further rate hikes are on the horizon, but the gain was limited by weaker commodity prices, while the Japanese yen remained near a 24-year low.
After Reserve Bank of Australia (RBA) Governor Philip Lowe signalled a lot more policy tightening ahead, the Australian dollar was 0.3 percent higher at $0.69675, extending the previous day's minor gains.
Lowe stated that rates were still "extremely low," and that increasing inflation should not affect public expectations or wage claims.
The RBA's minutes from its June meeting, at which it hiked rates by a larger-than-expected 50 basis points, emphasised the central bank's inflation concerns.
Still, weaker commodity prices are putting pressure on the Australian dollar, and CBA strategists say that additional decreases in iron ore prices will weigh on the currency in the short term, while slower global growth will be a drag in the long run.
"We expect the AUD/USD to trade in a 0.600.70 range for the next twelve months," they wrote in a note.
The Japanese yen continued under pressure in other markets, trading at 135.1 yen per dollar, not far from a 24-year low of 135.58 yen recorded early last week, after the Bank of Japan on Friday shattered any minor expectations of a policy shift and reaffirmed its commitment to ultra-easy monetary policy.
The euro was a bit higher at $1.0519, as words from European Central Bank President Christine Lagarde on Monday about the need to prevent financial fragmentation between euro countries overshadowed the negative impact of French President Emmanuel Macron's legislative majority loss.
The Australian dollar and the euro were also helped by a general increase in risk sentiment throughout markets, with U.S. equity futures up by 1%.
The dollar index, which compares the greenback to six major currencies, was down a smidgeon at 104.38. [MKTS/GLOB]
The key event for the dollar this week is Federal Reserve Chair Jerome Powell's semi-annual two-day report to Congress, which begins on Wednesday.
Sterling was trading at $1.227, up from a two-year low of $1.1934 last week.
In recent days, Bitcoin had failed to break strongly above or below the psychologically critical $20,000 mark, and was trading near $20,500.
