SINGAPORE- The US dollar regained some ground on Tuesday and hovered near a one-week high against a basket of currencies, while the Australian dollar fell after its central bank left interest rates unchanged.
The Aussie was last down 0.66 percent to $0.6576 after the Reserve Bank of Australia (RBA) kept rates at a 12-year high of 4.35 percent on Tuesday, as expected, and noted that economic data received since November had been broadly in line with expectations.
That left the Antipodean currency some distance away from Monday’s four-month top of $0.6690, which it hit on the back of the dollar’s decline over the past few sessions.
“The Aussie has had a great run in recent weeks and was arguably overbought over the near-term,” said Matt Simpson, senior market analyst at City Index.
“So we may be seeing a combination of profit taking following the fact of the RBA’s hold, and the closure of pre-emptive bets that the RBA may have delivered a more hawkish statement.”
The decline in the Aussie also dragged the New Zealand dollar slightly lower, with the kiwi last down 0.35 percent to $0.6146.
Elsewhere, the greenback held broadly steady and pushed away from Monday’s three-month low against the yen. The dollar last traded at 147.10 yen helped by a slowdown in core consumer inflation in Tokyo that put downward pressure on the Japanese currency.
The euro meanwhile, languished near a three-week low hit on Monday and last traded $1.0842, while the dollar index stood near a more than one-week high and was last at 103.60.
Sterling was little changed at $1.26345, some distance away from its recent three-month high.