OANDA Australia and Asia Pacific senior trader Stephen Innes said the Aussie was still soft in the wake of the federal government’s budget review on Monday.
“We’ve also seen a stronger US dollar against the euro, and base metals again came off fairly aggressively yesterday, with copper leading the charge — that’s also been weighing negatively on sentiment,” Mr Innes said.
The Aussie was little changed after the minutes from the Reserve Bank’s December monthly board meeting and interest rate decision were released at 11.30am (AEDT). “The market does not see their (the RBA’s) direction changing significantly,” Mr Innes said.
“The general drift I got from the statement was that we’re not going to be looking to change policy — that’s supportive.”
The Reserve Bank warned of significant adverse impacts on the global economy if US president-elect Donald Trump enacts policies to restrict global trade. The RBA board left interest rates on hold at an all-time low of 1.5 per cent earlier this month, citing uncertainty about spillover impacts of the proposed policies of the incoming US administration.