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Australian Dollar Firms As RBA Keeps Cash Rate Unchanged

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The Australian dollar drifted higher against its major counterparts in the Asian session on Tuesday, after the Reserve Bank of Australia left its cash rate unchanged at a record low, asserting that an extended period of low interest rates would be required to boost employment and achieve the inflation target.

The board of the Reserve Bank of Australia, governed by Philip Lowe, decided to leave the cash rate unchanged at a record 0.75 percent.

Policymakers said the easing of monetary policy since June is supporting employment and income growth and a return of inflation to the medium-term target range.

The bank reiterated that it is prepared to ease monetary policy further if needed to support sustainable growth in the economy, full employment and the achievement of the inflation target over time.

Investors cheered reports that U.S.-China trade talks are heading closer towards an accord.

The Financial Times reported that the United States is considering rolling back levies on $112 billion of Chinese imports, which were introduced at a 15 per cent rate on September 1.

The aussie showed mixed trading on Monday, by falling against the greenback and the euro but holding steady against the yen and the kiwi.

The aussie appreciated 0.4 percent to 0.6907 against the greenback, from a 6-day low of 0.6877 it touched at 5:45 pm ET. The pair had finished Monday's deals at 0.6884. Should the aussie rallies further, it is likely to test resistance around the 0.71 region.

The aussie was up by 0.7 percent at a 5-day high of 75.16 against the yen, after a 4-day decline to 74.66 at 5:45 pm ET. The pair was valued at 74.74 when it ended trading on Monday. Next immediate resistance for the aussie is likely seen around the 78.5 level.

Data from the Bank of Japan showed that Japan monetary base rose 3.1 percent on year in October - coming in at 517.100 trillion yen. That's up from the 3.0 percent increase in September.

The aussie gained 0.5 percent against the euro, approaching a 5-week high of 1.6106. The rally came after a 4-day decline to 1.6181 at 8:30 pm ET. The euro-aussie pair was quoted at 1.6165 at Monday's close. The aussie may face resistance around the 1.57 mark, if it climbs again.

After a brief decline to 1.0746 against the kiwi at 5:00 pm ET, the aussie turned higher, rising 0.3 percent to a 5-day high of 1.0779. The aussie had finished yesterday's trading session at 1.0752 against the kiwi. The aussie is seen challenging resistance around the 1.09 mark.

The aussie was 0.4 percent higher at 0.9085 against the loonie, following a session's decline to 0.9046 at 5:45 pm ET. At Monday's close, the pair was worth 0.9052. Extension of the aussie's uptrend may take it to a resistance around the 0.92 region.

Looking ahead, U.K. services PMI for October and Eurozone PPI for September are due in the European session.

In the New York session, U.S. and Canadian trade data and ISM services PMI for October are scheduled for release.

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