Aussie dips further after April minutes show caution
The Aussie fell further in Asia on Tuesday as the central bank released minutes for the April meeting that suggested caution on rate views and as markets looked ahead to comments by U.S. Vice President Mike Pence in Tokyo on continued tension on the Korean peninsula.
AUD/USD traded at 0.7563, down 0.37%, while USD/JPY rose 0.15% to 109.06.
The Reserve Bank of Australia released minutes from its April review at which it held steady at a record low 1.5% for the cash rate. Separately, China reported house prices for March rose 11.3%, a dip down from 11.8% the previous month.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.05% to 100.25.
Pence is expected to discuss Korean tensions with Japanese Prime Minister Shinzo Abe on Tuesday when he travels to Tokyo for economic talks with Finance Minister Taro Aso. He will also visit Jakarta and Sydney later in the week.
Overnight, the dollar fell sharply against a basket of major currencies on Monday, as investors fled the greenback amid rising tensions over North Korea.
Despite China’s efforts to dissuade North Korea from carrying out continued missiles tests, the Kim Jong-Un led nation attempted to fire a ballistic missile on Sunday but it blew up almost immediately.
Pence responded to North Korea’s failed missile attempt Monday, warning that “the era of strategic patience” with North Korea “is over”. Meanwhile, weaker than expected economic data weighed on sentiment, after New York area manufacturing slowed by more than expected in April.
The Empire State manufacturing survey fell to a reading of 5.2 April, well below consensus expectations for a reading of 15.
The rising geopolitical concerns stoked a flight to safety sentiment, as investors fled the dollar in favor of safe-haven yen.