Forex – Aussie, kiwi move higher after RBA holds; eyes on Pyongyang

Aussie and kiwi rise against greenback; RBA leaves policy unchanged – The Australian and New Zealand dollars moved higher against their U.S. counterpart on Tuesday, after the Reserve Bank of Australia lef interest rates unchanged and as markets continued to focus on developments in North Korea.

AUD/USD rose 0.20% to 0.7961 after the RBA held its benchmark interest rate at 1.50%, in a widely expected move.

Commenting on the decision, RBA Governor Philip Lowe said recent data had been consistent with the bank’s expectation that growth in the economy would gradually pick up in the coming year.

Also Tuesday, the Australian Bureau of Statistics said the current account surplus widened to A$9.6 billion in the second quarter from A$4.8 billion in the first quarter of the year, whose figure was revised from a previously estimated surplus of A$3.1 billion.

Analysts had expected the current account surplus to hit A$8.1 billion in the last quarter.

NZD/USD edged up 0.13% to trade at 0.7171.

Meanwhile, investors remained cautious following North Korea’s latest provocation, when it conducted over the weekend a test of a hydrogen bomb intended to be mounted on an intercontinental ballistic missile.

U.S. Defense Secretary James Mattis on Sunday warned North Korea that any threat to the U.S. or its allies would be met with a “massive military response”.

On Monday, South Korea’s defense ministry said it was still seeing signs that Pyongyang plans to launch more ballistic missiles.

In other news, markets were also jittery as the U.S. Treasury Department has a September 29 deadline to raise the debt limit.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was steady at 92.53 by 02:10 a.m. ET (06:10 GMT).

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