By Joseph Adinolfi, MarketWatch
Aussie outperforms after RBA shift
The dollar weakened against commodity-sensitive and
emerging-markets currencies Tuesday as oil prices rebounded and
China's stock market recorded a second day of gains, increasing
investors' tolerance for risky assets.
Meanwhile, the buck weakened slightly against its major rivals,
but remained well within a narrow range that has held since the
beginning of last week.
But volatility will likely return Wednesday, as several key U.S.
data releases -- the ADP employment report, U.S. international
trade data for June and the ISM non-manufacturing index -- are on
tap, said Boris Schlossberg, managing director of FX strategy at BK
Asset Management, in a note to clients.
The euro strengthened to $1.0970, from $1.0954 late Monday in
New York; the dollar traded at 123.99 yen, little changed from its
late-Monday level; and the pound edged higher to $1.5618, from
$1.5586.
The Australian dollar was the best-performing currency against
the dollar Tuesday, strengthening 1.7% to 74 cents, its highest
level in about two weeks. It traded at 72.73 cents late Monday in
New York.
Policy makers from the Reserve Bank of Australia adjusted the
language in their latest policy statement, released early Tuesday,
to suggest that the Aussie has reached what they believe to be a
fair value against the dollar, said Jane Foley, a senior currency
strategist at Rabobank.
In its statement Tuesday, the central bank said the Aussie
"...is adjusting to the significant declines in key commodity
prices." Past statements indicated that further depreciation was
both likely and necessary.
"For the first time in a long time, the RBA isn't complaining
about Aussie dollar strength," Foley said.
Elsewhere, the Canadian dollar , Mexican peso and Brazilian real
all traded higher against the dollar.
The ICE U.S. Dollar Index , a measure of the dollar's strength
against a basket of six rival currencies, was down 0.2% to
97.3170.
Oil prices crept higher Tuesday
(http://www.marketwatch.com/story/oil-prices-creep-higher-after-prior-days-selloff-2015-08-04)
after Brent crude , the international benchmark, settled below $50
a barrel on Monday for the first time since January.
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