Australian Dollar Reverses Gains After the RBA Holds Rate

The Australian dollar plunged sharply on Tuesday after the latest rate decision from the Reserve Bank of Australia. The Aussie pared earlier gains to drop to the lowest level since last Wednesday versus the greenback.

The currency pair AUDUSD nose-dived more than 0.6 percent to trade around $0.7613 after Governor Philip Lowe and his board held the cash rate at record-low 1.5 percent as expected by markets, reversing steeply lower after an advance in early Asian trade.

The Aussie had risen to as high as $0.7682 on Tuesday as retail sales data beat forecast. According to the Australian Bureau of Statistics, the country’s retail sales gained 0.6% month-on-month in May. Led by strong spending on household goods, the data rose for a second straight month after a rise of 1.0% in April. The figure was also well above a 0.2% rise expected by economists.

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