The Australian dollar drifted lower on Tuesday ahead of US Federal Reserve Chairman Alan Greenspan's testimony to Congress, but remained supported by buyers on moves towards 73 US cents.
There was some disappointment that the Aussie failed to hold on to its 200-day moving average at 73.34 cents, leaving it vulnerable to a further correction to Monday's rally to a three-month high of 73.48 cents.
Still, market direction will come from Greenspan's testimony over the next two days.
"We expect him to be confident about growth but untroubled by inflation, a combination likely to see continuing weakness in the US dollar and firm support for the Australian and New Zealand dollars," said HSBC chief economist John Edwards.
The AUD was $0.7307/11 compared with $0.7233/38 late here on Monday.
The USD stabilised on Tuesday after falling sharply since Friday's benign US inflation report, which was effectively seen as ruling out an aggressive policy stance by the Fed for now.
Comments
Comments are closed.