The Australian dollar rose in Asian trade against a basket of major rivals, rebounding off a week low against its US counterpart and becoming the best performing major currency following the RBAs decisions.

The Reserve Bank of Australia decided to hold interest rates unchanged today and warned from continued inflation risks, which reduced the odds of interest rate cuts this year.

The Pair

The AUD/USD pair rose 0.2% today to 0.6627, with a session-low at 0.6600.

The pair lost 0.1% on Monday, the third loss in a row, plumbing week lows at 65.85 cents following grim data from China, which is Australias biggest trading partner.

G8 Currencies

The Aussie became the best performing G8 currency today, with a 0.2% profit against the US dollar, and a 0.3% rise against both the euro and sterling, and a 0.2% increase against the franc, and a 0.4% increase against the yen.

The RBA

The Reserve Bank of Australia voted to hold interest rates unchanged at 4.35%, the highest since November 10.

The Bank pointed to persistent inflation risks, especially after recent data, with the bank remaining vigilant for the time being.

Michelle Bullock

RBA President Michelle Bullock said that the RBA still has a long way to go before bringing inflation to targets in the medium term.

She said there are no reasons currently to raise interest rates, however a rate cut is still not on the cards for the time being.