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Australian Dollar Higher As RBA Leaves Rate Unchanged Unexpectedly

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The Australian dollar strengthened against its major counterparts in the Asian session on Tuesday, after the Reserve Bank of Australia kept its cash rate on hold, against expectations for a rate cut, saying that a further improvement in the labor market could be required for inflation to be consistent with the target.

The RBA decided to maintain the cash rate at 1.50 percent, where it has been since August 2016.

Economists had expected a 25 basis point cut to 1.25 percent.

"Given this assessment, the Board will be paying close attention to developments in the labour market at its upcoming meetings," the RBA said.

The aussie was lower against its most major rivals on Monday, as mounting U.S.-China trade tensions reduced the demand of riskier assets.

The aussie fell 0.4 percent against the greenback, 0.7 percent against the yen and 0.5 percent against the euro for the day.

The aussie appreciated 0.9 percent to a 6-day high of 0.9455 against the loonie, after falling to more than a 2-month low of 0.9370 following RBA announcement. The pair had finished yesterday's trading at 0.9399. The aussie is seen finding resistance around the 0.965 level.

The Australian currency added almost 1 percent to a 6-day high of 0.7048 against the greenback, reversing from a low of 0.6979 touched at 5 pm ET. The pair was valued at 0.6990 when it ended deals on Monday. Next key resistance for the aussie is seen around the 0.715 level.

The aussie was 1.08 percent higher at a 4-day high of 78.05 against the yen, after falling to 77.21 at 5 pm ET. The aussie-yen pair was quoted at 77.42 at Monday's close. On the upside, 80.5 is possibly seen as the next resistance level for the aussie.

The aussie advanced to 1.5904 against the euro, marking its highest since May 1, and was up by 0.8 percent from a low of 1.6039 hit at 5:00 pm ET. At yesterday's New York session close, the pair was worth 1.6021. The aussie is poised to test resistance around the 1.58 level.

Following a low of 1.0561 seen at the beginning of today's trading, the aussie snapped back after RBA statement, touching near a 2-week high of 1.0642 against the kiwi. The aussie-kiwi pair had ended Monday's deals at 1.0577. Should the aussie extends its uptrend, 1.07 is likely seen as its next resistance level.

Looking ahead, Canada Ivey PMI for April and U.S. consumer credit for March will be out in the New York session.

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