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Aussie dollar slips on resurgent greenback

Xinhua, July 12, 2016 Adjust font size:

The Australian dollar has slipped on a resurgent greenback overnight after indications of new monetary stimulus from Japan.

At the Asian open on Tuesday, the Australian dollar was trading at 75.34 U.S. cents, down from 75.48 U.S. cents at Mondays close.

The U.S. dollar moved above its 200-day moving average overnight, reflecting a slump in the Japanese Yen following the Japanese elections Prime Minister Shinzo Abes stating he planned to use fiscal stimulus to support the economy.

The unit however is expected to recover as traders position ahead of the Bank of Japan and Bank of Canadas policy meetings as well as an expected drawn out U.S. Federal Reserve tightening cycle, despite U.S. treasury yields gaining overnight.

"Expectations for the FOMC lifted yesterday by up seven basis points but a 0.25 percent rate hike is not fully priced until mid-2018," Commonwealth Bank of Australia international economist and currency strategist Joseph Capurso said.

The prospect for more accommodative monetary policy from major central banks and reasonable global economic activity is Australian dollar supportive."

At 0930 local time (AEST), the Australian dollar was steady at 75.34 U.S. cents. Endit