By Lisa Twaronite, MarketWatch
TOKYO (MarketWatch) -- The lower-yielding U.S. dollar and yen got a lift in Asian trading Tuesday, after the Reserve Bank of Australia surprised markets by holding its policy rate unchanged, but later gave up some of those gains.
The RBA left its key rate at 3.75% after a string of increases at its previous three meetings. Analysts had widely expected a rate increase of 25 basis points to 4.0%. See full story on Reserve Bank of Australia rate decision.
The Australia dollar fell immediately following the decision. It was trading at 88.08 U.S. cents, down from 89.22 U.S. cents before the announcement, and down 1.1% from the previous session.
The dollar index (DXY 79.19, -0.05, -0.06%) , which tracks the greenback against a trade-weighted basket of six major currencies, fell to 79.171, from 79.229 in late Monday's North American trading.
The euro traded at $1.3932, slightly up from $1.3929 late Monday. The dollar bought 90.60 yen, down from 90.71 yen.
On Monday, the U.S. dollar declined versus the euro, slipping from a 7-month high, but gained against the yen after a pair of reports showed U.S. consumer spending rose in December and manufacturing activity last month improved. See full story.
