Dollar trims gains as trade optimism fades, Aussie near lows post RBA cut

Dollar trims gains as trade optimism fades, Aussie near lows post RBA cut

02 Jul 2019 12:42 PM
 

The dollar gave up gains on Tuesday as investors curbed earlier enthusiasm about U.S.-China trade progress while the Australian currency barely budged from recent lows after a central bank rate cut decision offered few clues about future easing.

The U.S. dollar index against a basket of six major currencies earlier rose to its highest in a week but retreated as doubt set in about the resumption of U.S.-China efforts to resolve their trade war.

The market focus now shifts to Reserve Bank of Australia Governor Philip Lowe, who speaks to business leaders in the northern Australian city of Darwin today, which could provide clues on how much further interest rates could fall.

The Australian dollar was up 0.3% at $0.6983 on Tuesday after slumping 0.9% on Monday, its biggest decline since April 24.

The RBA lowered interest rates by 25 basis points to a record low of 1.00%, matching economists' expectations. In a statement the central said it would lower rates again "if needed," a phrase some analysts took to mean an additional rate cut is less certain than before.

The U.S. dollar index was little lower at 96.74 on Tuesday having posted its biggest increase since March 7 on Monday on hopes Beijing and Washington were making headway in their trade negotiations.

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