Dollar Steady, Aussie Outperforms on RBA Surprise
A dollar gauge swung between gains and losses on Tuesday, and is poised to end the session at little changed as President Donald Trump’s tariff deadline extension prolonged uncertainty for the Federal Reserve and the market. The Australian dollar led gains in the Group of 10 following the domestic central bank’s hawkish surprise, while the yen and British pound were among worst performers.
The Bloomberg Dollar Spot Index traded near flat.
AUD/USD rallies as much as 1% to 0.6558 after Australia’s central bank surprised investors and the majority of economists by keeping interest rates unchanged.
Governor Michele Bullock said the decision was about the timing of a move, rather than the direction.
EUR/USD rose 0.2% to 1.1728; the European Union is seeking to conclude a preliminary trade deal with the US this week that would allow it to lock in a 10% tariff rate beyond an Aug. 1 deadline as they negotiate a permanent agreement
USD/JPY climbed 0.4% to 146.63, extending Monday’s 1.1% rally
“The JPY is in a bit of hot water these days with the election looming and the cost of living crisis in the news on a daily basis,” said Brad Bechtel, global head of FX at Jefferies. “The JPY crosses are on fire”
EUR/JPY rose 0.5% after a similar jump Monday, GBP/JPY up 0.3%, adding to 0.8% advance the day before
GBP/USD declined 0.1% to 1.3593
Britain is at risk of a £22 billion ($29.9 billion) surge in debt-interest costs as pension schemes buy fewer government bonds, threatening to worsen an “unsustainable” outlook for the public finances
USD/CHF fell 0.3% to 0.7958; this year, the Swiss franc is up about 14% against the greenback, becoming the second-best performing currency
Source : Bloomberg
