Dollar Firms As USD/JPY Recovery Continues, A$ Down Post RBA

The BBDXY sits firmer in the first part of Tuesday dealing. The USD index last near 1252.70, around 0.1% stronger for the session so far. Yen losses and an AUD dip post the RBA have been the main focus points.

• The RBA left rates unchanged as widely expected, but the statement didn't contain any hawkish shift in terms of the rates bias, while the RBA inflation outlook still has prices returning towards target unchanged from the prior meeting. This comes despite the Q1 upside inflation surprise.
• Given adjustments to market pricing this has been enough to weigh on the AUD. We are back to 0.6600, off around 0.4%, and close to session lows.
• NZD/USD is close to unchanged, last near 0.6005/10, hence the AUD/NZD cross is down to 1.0985/90.
• USD/JPY has continued to recover ground, last near 154.50. Earlier highs in the pair were at 154.65. In the absence of further intervention flows the path of least resistance in USD/JPY has been to the upside. Earlier dips to 153.85/90 were supported.
• Still to come we have RBA Governor Bullocks press conference. Later the Fed’s Kashkari speaks and March US consumer credit is released. There are also March German factory orders and euro area retail sales.