Trading in a 55 pip range overnight, the Aussie dollar dropped on Tuesday but managed to hang on to most of Monday’s strong gains. Falling overnight from levels of 0.7650 to session lows of 0.7595 before consolidating around the 0.7615 handle, the currency finished the day as the biggest underperformer of it’s G10 peers.
As widely expected, the RBA maintained it’s current monetary policy stance at yesterdays meeting keeping the cash rate on hold at 1.5% for the 20th consecutive meeting. Whilst highlighting that recent Australian data has been largely in line with their forecasts for growth to pick up above 3% in 2018 and 2019, they remain cautious on uncertain areas of the economy, especially consumer spending, low wage growth and inflation. With no substantive changes in tone evident in the post meeting statement, data on unemployment, wages, inflation and the housing market will remain key for the policy outlook in the near term.
Traders will be looking towards todays Australian GDP release at 11:30 today. Leading indicators over the past week or two are suggestive we could be in line for a strong quarterly print which could provide further upside for the AUD. On the technical front, resistance is seen at the 0.7668 and 0.7700 handles with the currency well supported at levels closer to 0.7560.