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Aussie Dollar Unchanged After RBA Decision; USD Flat

6/4/2019, 3:28:38 PMBasics of Trading
Aussie Dollar Unchanged After RBA Decision; USD Flat

The Australian dollar traded near flat on Tuesday in Asia following the Reserve Bank of Australia (RBA)’s decision to cut rates to a historic low of 1.25%.


The AUD/USD pair was up 0.04% to 0.6978 by 1:00 AM ET (05:00 GMT). The Australian currency showed little reaction to the RBA’s rate cut decision, which was highly expected.


Governor Philip Lowe reiterated his prediction that the Australian economy would grow by 2.75% this year and next.


“The central scenario remains for the Australian economy to grow by around 2.75% in 2019 and 2020. This outlook is supported by increased investment in infrastructure and a pick-up in activity in the resources sector, partly in response to an increase in the prices of Australia’s exports,” the governor said.


Meanwhile, the U.S. dollar index was also near flat after falling to near a one-week low the previous session on the back of weaker-than-expected manufacturing activity for May.


The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, gained 0.06% to 97.132.


The Mexican peso edged up against the U.S. dollar, as the currency continued its recovery after plummeting last week on U.S. President Donald Trump's sudden threat to impose tariffs.


"The Mexican news is quite punchy. No one was really expecting it to the same extent they were with China," said Chris Weston, Melbourne-based head of research at foreign exchange brokerage Pepperstone. "Mexico is a huge trade partner with the U.S.," he said.


The USD/JPY pair slipped 0.1% to 107.96.


The USD/CNY pair gained 0.1% to 6.9064.