TOKYO- The Australian dollar ticked higher on Tuesday ahead of an expected half-point increase in the Reserve Bank’s policy rate, while the yen slid against the greenback amid a rise in US Treasury yields.
The Aussie and New Zealand dollars were also supported by signs that the United States might soon ease tariffs on key trading partner China.
Australia’s currency climbed 0.29 percent to $0.6888, while New Zealand’s kiwi rose 0.21 percent to $0.6222.
At the same time, the US dollar was up 0.35 percent at 136.165 yen, gaining support from a strong rebound in the 10-year Treasury yield, which jumped to 2.9780 percent in Tokyo on Tuesday from the lowest since May at 2.7910 percent on Friday.
There was no trading in Treasuries on Monday, with US markets closed for the Fourth of July holiday, which also resulted in thin currency-market trading.
Economists polled by Reuters expect the Reserve Bank of Australia on Tuesday will deliver another half-percentage-point rise in interest rates as it fights to tame inflation at two-decade highs, matching the increase it delivered last month in a hawkish surprise.
The Aussie was also supported by a Wall Street Journal report that the White House would announce an easing of some Chinese tariffs later this week in an attempt to dampen elevated inflation, analysts said.
The dollar index, which measures the buck against six major peers, including the yen, was about flat at 105.13 after finishing Monday largely unchanged.
On Friday, it rose as high as 105.64, threatening the two-decade peak of 105.79 reached in mid-June. – Reuters
