Australian dollar falls after RBA rate statement
The Australian dollar fell on Tuesday, after the Reserve Bank of Australia’s decision and monetary policy statement.
The Reserve Bank of Australia kept the interest rate at 0.25% unchanged, which was widely expected in the market.
The bank is still expecting further damage to the economy due to the coronavirus crisis, and noted that a full recover needs containing the pandemic.
The Australian government recently imposed lockdown restrictions on the state of Victoria due to the rising number of coronavirus infections.
The central bank sees that individual consumers and companies need to be more confident in the government's measures to contain the virus, in order to prevent its spread and another lockdown.
The bank also stated that the Australian economy recovery is bound by a better-than-expected improvement in the jobs market and employment pace.
As of 18:38 GMT, AUD/USD fell 0.5% to 0.7145, after hitting a high of 0.7209 and a low of 0.7143.
The US dollar slipped against most of its major counterparts on Wednesday, to pare its early gains, despite the release of better-than-expected economic data in the US. Investors are focusing on the ongoing debate between the White House and Congress about the second Covid-19 stimulus package. Johnson & Johnson announced this week pausing the clinical trials for its COVID-19 vaccine candidate after an unexplained illness in one of the volunteers. Data showed today that the US producer price index rose 0.4% in September, beating forecasts of 0.2%. The core reading (excluding food and fuel prices) also rose by 0.4%, better than forecasts of 0.2%. The dollar index fell against a basket of currencies by 0.2% to 93.3 points as of 20:00 GMT, after it hit a high of 93.6 and a low of 93.2.
At 12:30 GMT, the US economy released it reading for the the unemployment rate for September at 7.9%, better than forecasts of 8.2%, and better the previous reading of 8.4%. This data is positive for the US economy.
The US dollar fell against most of its peers on Tuesday, and hit a 1-week low, as investors await the latest developments about the second Covid-19 stimulus package in the US. US Treasury Secretary Steven Mnuchin will meet with several Congress members both Republicans and Democrats to pave the way for an agreement on the second fiscal aid package. The Trump Administration has proposed more than $1.8 trillion within the second Covid-19 package to pass it in Congress to support the US economy. Data showed today that the US housing starts index rose by 1.9% to 1.415 million units during September. The dollar index fell against a basket of currencies by 0.4% to 93.09 points as of 20:29 GMT, after it hit a high of 93.5 and a low of 93.1.