The Australian dollar remained stable, hovering around a nine-month high fueled by rising commodity prices, ahead of the country’s central bank’s interest rate decision later in the day.
The United States and European countries pledged on Monday to punish Moscow for the killing of civilians in northern Ukraine, where a mass grave and tied bodies of people shot at close range were discovered in a town recaptured from forces Russians.
The deaths in Buca, outside Kyiv, have prompted promises of further sanctions against Moscow from the West, including possibly curbs on the billions of dollars of energy Europe still imports from Russia . The Kremlin has denied charges related to the killing of civilians.
Europe’s single currency was little changed at $1.0975 after falling as low as $1.0960 in the previous session for the first time since March 28. It had hit a one-month high at $1.1185 a few days earlier amid heightened optimism that the conflict in Ukraine was over.
The euro’s woes boosted the dollar index, which held near a one-week high of 99.083 hit overnight. It last stood at 98.949.
The dollar weakened 0.20% to 122.515 yen, broadly tracking movements in long-term US Treasury yields, as it continues to consolidate around 122.5 after falling from a multi-year high of 125.105 on March 28.
Bank of Japan Governor Haruhiko Kuroda added further pressure to the currency pair, saying the recent pace of appreciation was “somewhat brisk” and policymakers were watching the moves “closely”.
Meanwhile, the Aussie was flat at $0.7541, remaining near Monday’s high of $0.75565, a level not seen since July 6.
The Reserve Bank of Australia is expected to keep the benchmark rate at a record 0.1% on Tuesday, but investors will be watching as it removes a sentence from its post-meeting statement that “the Council is ready to be patient” in terms of tightening.
“Such a change in language will reinforce our call for the RBA to start raising the Bank Rate at its June meeting and support the Australian dollar,” Commonwealth Bank of Australia strategist Carol Kong wrote in a statement. customer.
The “very large” rise in commodity prices over the past month has pushed the bank’s estimate of the Aussie’s fair value up to a range of $0.82-0.95, centered at 0, $89, she wrote.