The Australian dollar took a breather on Tuesday after scaling new highs in recent sessions, while the country's central bank reiterated its view the economy is on a sound track and rates are fine for the time being. The Reserve Bank of Australia (RBA) kept rates at 4.75 percent for a fifth month saying a lofty local dollar, moderate wages growth and intense retail competition would help keep inflation contained for the year ahead.
The Australian dollar briefly dipped a slight 12 pips to a session low of $1.0312 after the announcement, which was widely expected, and quickly came back to $1.0334, close to 29-year highs struck the previous day. Prior to the RBA decision, the local currency had also taken a slight hit from data showing Australia suffered a trade deficit of A$205 million in February, well below expectations of a A$950 million surplus and the first deficit in 11 months. The New Zealand dollar edged lower at $0.7680, after touching a near two-month high of $0.7705 offshore. Support is seen at $0.7645, and resistance around $0.7705.