The
Australian dollar traded higher for the first time in three sessions versus its
U.S. counterpart on Tuesday after the Reserve Bank of Australia (RBA) provided
less downbeat tone on the economy and said it would buy more bonds.
The
AUDUSD was 0.16 percent up at 0.7135 after the RBA said the economy’s outlook has
been less severe than predicted and stressed that recovery will continue
despite renewed lockdowns in Victoria, Queensland and New South Wales.
The
economy would recover most of the losses incurred from the lockdowns imposed to
contain the covid-19 pandemic before the end of next year, the RBA said.
The
RBA mentioned that it “is committed to do what it can” to support jobs, incomes
and businesses across the country.
As
for bind purchases, the RBA Governor Philip Lowe said: “Tomorrow the Bank will
purchase AGS in the secondary market to ensure that the yield on 3-year bonds
remains consistent with the target.”
The
Aussie dollar has been moving upwardly since hitting a low of 0.5509 on March
19, where it hit a peak of 0.7227 on Friday, which was the highest since early
February.
The
latest dismal economic reports from the U.S., rising coronavirus cases and
elevating tensions between the U.S. and China prompted the dollar index to
suffer its worst monthly decline since September 2010 in July, falling 4.1
percent.
Eyes
will focus on talks between U.S. lawmakers as they seek to reach consensus on the
shape of a spending bill that help American households who suffered from
the pandemic.
On the economic
agenda, U.S. factory orders for June due later in the day may signal a 5.1
percent increase, following an 8.0 percent surge in May.
