By FX Empire.com
The AUD/USD pair dropped early Tuesday after the Reserve Bank of Australia cut its cash target by 25 points to 4.50% for the first time since 2009. On the other hand, the greenback consolidated against other majors before the FOMC rate decision.
The RBA indicated that slowing demand and high rates have anchored inflation pressures and with overall moderate growth and subdued confidence inflation is likely to remain contained and a normal monetary stance is warranted to support growth with inflation as well between 2 percent and 3 percent.
Despite that the rate reduction was widely expected, Aussie retreated against the US dollar as investors sentiment is turning negative again on fears over the outlook especially after the weak Chinese PMI and worsening outlook for Europe again after Greek prime minister unexpectedly called for a referendum on the new bailout.
The fears supported haven demand on the dollar and risk aversion which further pressured the Australian dollar to the downside.
At 00:00 GMT, Australia will release the monthly new home sales figures for September which had a prior reading of 1.1%.
At 00:30 GMT will be the release of the monthly building approvals for September, where the prior reading rose 11.4%, and on the year it had a previous of 5.5%.
The U.S. economy will release the ADP employment change for August at 12:15 GMT, where it’s expected at 101 thousands from the previous reading of 91 thousands.
At 16:30 GMT, the Federal Open Market Committee will announce its Rate Decision, which is expected to be steady between 0.0% and 0.25%; and at 18:15 GMT Fed’s Governor Bernanke will speak at the Fed Press Conference.
See what are the upcoming financial event on the FX Empire Forex Economic Calendar now.
