Aussie Dollar Recovers after Early Setback

The Australian Dollar recovered on Tuesday after an earlysetback. The Aussie was pressured overnight following a sell-off triggered bythe surprise news that the central bank passed on another interest rate hike.

The Australian Dollar recovered on Tuesday after an earlysetback. The Aussie was pressured overnight following a sell-off triggered bythe surprise news that the central bank passed on another interest rate hike.

The Aussie erased losses against the U.S. Dollar afterdemand for higher-yielding assets soared, sending commodity and equity priceshigher.

The Reserve Bank of Australia kept its benchmarkinterest rate at 4.5%, surprising some traders who were looking for a 25 basispoint hike. The central bank cited moderate inflationary growth as the mainreason behind the decision to pass on the hike. Central bank officials are mostlikely waiting for more information to confirm the economy is heating up enoughto warrant another rate increase.

Technically, one has to go to the monthly chart to seewhat’s stopping the AUD USD from rising. The 98.49 July 2008 top is currentlyproviding the resistance at this time.