Forexpros – The Aussie dollar rose against its U.S. counterpart Tuesday after the Reserve Bank of Australia left benchmark interest rates unchanged at 4.25%, citing confidence that the U.S. and Chinese economies could withstand shocks from a European meltdown.
AUD/USD hit 1.0789 in Asian trading on Tuesday, up 0.70% and up from a session low of 1.0702 and off from a high of 1.0808.
The pair sought to test support at 1.0684, Monday’s low, and resistance at 1.0808, the earlier Tuesday high.
The Aussie dollar weakened recently on weak retail sales data.
The Australian Bureau of Statistics reported that Australian retail turnover fell 0.1% in December of 2011, following a rise of 0.1% in November of 2011.
The data primed sentiments that the country’s central bank was planning to cut interest rates, but the currency snapped back Tuesday when bank said it was staying put.
“Recent data from the United States suggest a continuing moderate expansion after a soft patch in mid 2011. Growth in China has moderated as was intended, but on most indicators remained quite robust through the second half of last year,” the bank said in a statement.
China is a major buyer of Australian commodities.
The Aussie dollar, meanwhile, was up against the yen and up against its New Zealand counterpart, with AUD/JPY gaining 0.71% to 82.60 and AUD/NZD up 0.49% at 1.2920.
Later Tuesday, Fed Chairman Ben Bernanke is due to testify on the economic outlook and federal budget situation before the Senate Budget Committee in Washington.
In Australia, the Westpac Consumer Sentiment Index will hit the wires.
In Europe, markets will keep an eye on French trade balance figures, German industrial output data while the British Retail Consortium will unveil its Shop Price Index.
Canada will release its latest numbers on building permits.
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