Australian Dollar Slides Following RBA Monetary Policy Meeting

The Australian dollar weakened against other major currencies in the Asian session on Tuesday, after the Reserve Bank of Australia left its benchmark rate unchanged on Tuesday after a quarter point hike in November.

The policy board of the RBA, governed by Michele Bullock, decided to maintain the cash rate target at 4.35 percent. The board also retained the interest rate paid on Exchange Settlement balances at 4.25 percent.

"Holding the cash rate steady at this meeting will allow time to assess the impact of the increases in interest rates on demand, inflation and the labour market," the bank said.

According to the bank, the case for further tightening of monetary policy to bring inflation back to the target in a reasonable timeframe will depend upon the data and the evolving assessment of risks.

The Asian stock markets traded lower, following the broadly negative cues from Wall Street overnight, on rising treasury yields and as a stronger dollar weighed on commodity prices that took down materials and energy stocks. Traders also react to some economic data from the region.

Traders now look ahead to the release of the U.S. Labor Department's closely watched monthly jobs report on Friday, for more clues on interest rate outlook.

The Australian dollar traded lower against its major rivals on Monday.

In the Asian trading today, the Australian dollar fell to a 4-day low of 1.6494 against the euro and a 3-week low of 96.72 against the yen, from yesterday's closing quotes of 1.6369 and 97.43, respectively. If the aussie extends its downtrend, it is likely to find support around 1.68 against the euro and 94.00 against the yen.

Against the U.S., the New Zealand and the Canadian dollars, the aussie dropped to a 5-day low of 0.6571, more than a 1-1/2-month low of 1.0692 and nearly a 3-week low of 0.8913 from yesterday's closing quotes of 0.6619, 1.0733 and 0.8960, respectively. On the downside, 0.63 against the greenback, 1.05 against the kiwi and 0.87 against the loonie are seen as the next support levels for the aussie.

Looking ahead, final HCOB PMI reports for November from various European countries and U.K. and Eurozone PPI for October are due to be released in the European session.

In the New York session, U.S. and Canada PMI reports for November and U.S. Redbook report are slated for release.