The Reserve Bank of Australia announced on Tuesday that it would hold interest rates steady. In its first policy meeting of 2017, the country’s central bank expressed an optimistic outlook that the country’s economy would see 3 percent growth in the next few years, and kept rates at 1.5 percent for the seventh consecutive month. The RBA will release its full economic outlook on Friday. The announcement was welcomed though not surprising for market analysts, most of whom expected rates to remain as they were. The Australian dollar rose after the announcement to trade at $0.7671 against the U.S. dollar.
Tuesday Morning Market Moves
The yen dipped below the 112 handle on Monday and remained there on Tuesday, trading at 111.68 against the dollar. It also maintained its losses against the euro, trading at 119.75 to the euro, down from 121 last week. The dollar index traded at 99.907 .DXY on Tuesday morning, while oil prices rebounded from Monday declines. International Brent futures were trading at $55.89 per barrel, up 0.31 percent while U.S. WTI futures traded at $53.16 per barrel, a 0.28 increase. Mixed price indicators have kept crude price range-bound since the start of the year. Key price support is coming mostly from OPEC’s resolution to cut production by 1.8 million barrels per day in the first half of this year. Despite the resolution, gasoline stockpiles more than doubled since the start of 2017, indicating either a reduced demand or a continued oversupply, both of which may keep prices lower than anticipated.