MW: Dollar slips against Aussie after hawkish RBA minutes
By Lisa Twaronite, MarketWatch
TOKYO (MarketWatch) - The Australian dollar took center stage in Asian trading Tuesday, rising against its U.S. counterpart after minutes of the most recent Reserve Bank of Australia meeting suggested that more interest-rate increases are coming.
The minutes from the RBA's Feb. 2 meeting indicated further increases for the benchmark cash rate are likely, though not necessarily at the next meeting on March 2. See full story on RBA minutes.
"Markets are likely to take this RBA statement as having a hawkish stance," said currency strategists at Brown Brothers Harriman in a note to clients Tuesday.
Higher interest rates typically boost currencies because they raise the returns on assets denominated in those currencies.
The Australian dollar bought 89.55 U.S. cents, up 0.7%.
The U.S. dollar also edged down against other major rivals.
The dollar index (DXY 80.14, -0.19, -0.23%) , which tracks the greenback against a trade-weighted basket of six major currencies, slipped to 80.011 from 80.259 in late European trading on Monday.
U.S. markets were closed Monday for Presidents Day. Public holidays for the Chinese lunar new year also closed markets Monday in China, Hong Kong, South Korea, Taiwan and Singapore.
Investors await further details from a meeting of euro-zone finance ministers in Brussels, on last week's European Union vague vow to aid Greece if needed.
The euro traded at $1.3674 up from $1.3622 late Monday.
The dollar slipped to 89.82 yen from 89.94 yen late Monday.
On Monday, the euro held near eight-month lows against the U.S. dollar in thin holiday trading conditions, as investors awaited more details of the E.U.'s plan to ensure debt-burdened Greece doesn't default on its debt obligations. See Monday's Currencies report.
