Australian Dollar Advances Amid RBA Lowe's Speech

The Australian dollar climbed against its major rivals in early European deals on Tuesday, after the Reserve Bank of Australia Governor Philip Lowe suggested that there is no strong case for a near-term adjustment in monetary policy, but the bank's next move is likely to be a rate hike, rather than cutting it.

"If the economy continues to improve as expected, it is more likely that the next move in interest rates will be up, rather than down," Lowe said in Sydney.

"But the continuing spare capacity in the economy and the subdued outlook for inflation mean that there is not a strong case for a near-term adjustment in monetary policy. We will, of course, continue to keep that judgement under review," he added.

In economic front, weekly survey compiled by the ANZ bank and Roy Morgan Research showed that Australia's consumer confidence strengthened during the week ended November 19 to the highest level in sixteen weeks.

The consumer confidence index climbed to 116.4 from 114.8 in the preceding week.

The currency fell in the Asian session after the minutes from the Reserve Bank of Australia's November 7 meeting showed that the members were worried about slow wage growth.

"Members noted, however, that there was considerable uncertainty around when and how quickly wage pressures might emerge and about how much these would add to inflationary pressure," the minutes showed.

The aussie advanced to 0.7571 against the greenback, after having fallen to a 5-month low of 0.7532 at 8:45 pm ET. If the aussie rises further, 0.77 is possibly seen as its next resistance level. The aussie hit a 4-day high of 85.14 against the yen, following a decline to 84.75 at 3:45 am ET. Continuation of the aussie's uptrend may see it challenging resistance around the 87.00 area.

Data from the Ministry of Economy, Trade and Industry showed that Japan's all industry activity decreased at a faster-than-expected pace in September, after rebounding in the previous month.

The all industry activity index dropped 0.5 percent month-over-month in September, reversing a 0.2 percent rise in August. Economists had expected a 0.4 percent fall for the month.

Reversing from an early low of 1.5592 against the euro, the aussie climbed to a 5-day high of 1.5485. The aussie is seen finding resistance around the 1.53 mark.

The aussie spiked up to a 5-day high of 0.9699 against the loonie, off its early low of 0.9649. Further uptrend may take the aussie to a resistance around the 0.98 region.

The aussie edged up to 1.1111 against the kiwi, from its prior low of 1.1066. The next possible resistance for the aussie is seen around the 1.12 mark.

Looking ahead, Canada wholesale sales for September and U.S. existing home sales for October are due in the New York session.