Dollar treads water, Aussie edges up after RBA stands pat
The dollar, euro and yen treaded water on Tuesday in Asia, as the market was quiet with Tokyo on holiday and traders awaiting direction after the latest readings on global manufacturing activity failed to show clear economic trends.
In Asia, the Australian dollar was the biggest mover in an otherwise sedate session, rising after the Reserve Bank of Australia (RBA) left interest rates unchanged.
Australia's central bank kept its cash rate steady at a record low of 2.0 percent on Tuesday as widely expected, but said low inflation offered scope to ease further if needed.
While the question still appeared to be when and not if the RBA could cut rates in the near future, commentators suggested that the Aussie moved more on factors other than monetary policy.
"The recent track record suggests policy expectations have not been the dominant driver," wrote Todd Elmer, head of Citi's G10 strategy in Singapore. "AUD has actually gained as interest rate expectations have declined sharply, at least partly reflecting gains on the basis of rising risk appetite."
The Aussie was up 0.8 percent at $0.7200 AUD=D4. It touched a 6-1/2-year low of $0.6892 early in September when risk appetite globally was at a low ebb amid China worries. But the currency rebounded to as high as $0.7382 in mid-October as appetites improved.
The dollar index .DXY was barely changed at 96.907 after drifting between 96.635 and 96.965 all of Monday. The euro EUR= was hemmed in a tight $1.1000 to $1.1053 range and last stood at $1.1012.
Against the yen, the greenback was equally restrained, trading nearly flat at 120.73 JPY=, while the euro was steady at 133.94 yen EURJPY=R.
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