By Saumya Vaishampayan, MarketWatch
NEW YORK (MarketWatch) -- The U.S. dollar fell against the
Australian dollar Tuesday as investors looked ahead to Australian
first-quarter inflation data that could provide more evidence for a
rate hike from the country's central bank.
First-quarter inflation data for Australia are due at 9:30 p.m.
Eastern Tuesday. Investors are expecting the consumer-price index
to increase 0.8% in the period for an annual increase of 3.2%,
according to a Wall Street Journal survey. "That would be a pretty
big jump in CPI, putting annual inflation above the RBA's 2% to 3%
target range," said Omer Esiner, chief market analyst at
Commonwealth Foreign Exchange.
The Australian economic data, including recent employment and
retail-sales data, are "starting to paint a picture of an RBA that
is likely to raise rates in the months ahead," he said.
The Australian dollar (AUDUSD) rose to 93.66 U.S. cents from
93.33 U.S. cents late Monday, hovering below its high for the
year.
Investors also paid attention to comments from Australian
Treasurer Joe Hockey about how the central bank's switch to a more
neutral stance on monetary policy could exert upward pressure on
the Australian dollar, which will make it more difficult to manage
the economy, according to the Australian Financial Review.
The New Zealand dollar (NZDUSD) rose to 85.99 U.S. cents from
85.73 U.S. cents late Monday. New Zealand's central bank is likely
to raise rates at its meeting later this week, said Esiner. The
Reserve Bank of New Zealand hiked its key rate by 25 basis points
to 2.75% in March.
Other pairs saw limited movement Tuesday amid a lack of major
economic data. There are no Federal Reserve speeches scheduled this
week.
The euro (EURUSD) rose to $1.3805 from $1.3793 late Monday.
U.S. existing-home sales fell 0.2% last month to an annual rate
of 4.59 million. Economists had expected an annual rate of 4.55
million, according to a MarketWatch poll. Separately, home prices
rose 0.6% in February and gained 6.9% from a year earlier, the
Federal Housing Finance Agency said Tuesday.
The ICE dollar index (DXY), which pits the dollar against six
rivals, was at 79.891 versus 79.957 late Monday. The WSJ Dollar
Index , which measures the greenback against a broader basket of
rivals, was at 73.06 versus 73.10.
U.S. Vice President Joe Biden said Tuesday the U.S. is preparing
another round of economic sanctions against Russia unless it pulls
back from the Ukrainian border. "What is noteworthy is how
complacent markets are to geopolitical risk," said Camilla Sutton,
chief foreign-exchange strategist at Scotiabank, in a note.
The dollar (USDJPY) was flat at Yen102.60 from late Monday. The
British pound (GBPUSD) rose to $1.6826 from $1.6802 late
Monday.
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