Forex Asia Review – Australian Dollar falls after RBA keeps rate unchanged

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Forex News: Australian Dollar holds steady after Greek NewsThe Euro took a pause after its huge drop against the Dollar on Monday when risk aversion caused a huge sell off which was spurred by fears about the global economic recovery. EURUSD opened Asia at 1.4248 and closed at 1.4245. Investors are being cautious and are waiting for the outcome of the final U.S. debt vote in the Senate later today as well as economic data on Euro zone PPI. Final approval of the debt legislation in the Senate would send the debt-limit measure to Obama for his signature and conclude a months-long battle over raising the $14.3 trillion debt ceiling and cutting government spending.

 

 

Sterling slightly retraced from its big drop yesterday against the Dollar. Trading was light as investors take a breather after a busy trading day on Monday. There will be some economic data due later on U.K. construction PMI which is expected to fall. A recent spate of poor U.K. economic data has weighed on the Pound and given evidence on how sluggish the British economy still is. GBPUSD opened Asia at 1.6291and closed up at 1.6318.

 

 

 

USDJPY bounced to 77.80, well off the four-month low reached on Monday at 76.28. Investors are cautious of buying the Yen after a report yesterday of possible intervention in the FX markets in order to cap further appreciation in the Japanese currency. This helped prevent the Dollar from falling but it may be difficult to sustain for too long, depending on the outcome of the U.S. debt vote and the economic recovery in the U.S.

 

 

The Australian Dollar fell after the Reserve Bank of Australia left its benchmark interest rate unchanged at 4.75 percent. Even though this was in line with expectations, some were hoping for a rate hike. But the RBA statement issued after the rate announcement mentioned that the Board considered it was prudent to maintain the current setting of monetary policy, and that recent economic data did not warrant further policy tightening. AUDUSD fell to 1.0923 from 1.1004.

 

 

 

Gold edged higher only slightly after falling in the previous session. Investors are waiting and focusing on the U.S. debt ceiling deal, which is headed towards a final Senate vote later today. Spot gold climbed from $1,616.27 to $1,622.72.