Dollar inches back in late trade

The local unit has retreated from its overnight gain as traders digested the RBA’s statement.

The Australian dollar has slipped against the greenback late on Tuesday, retreating from an overnight gain achieved on the back of higher commodity prices.

At 6pm (AEST) on Tuesday, the local unit was trading at US75.14 cents, down from US75.40c on Monday.

The market was largely unmoved by the Reserve Bank of Australia’s decision to hold interest rates steady at its July meeting.

“Over the period ahead, further information should allow the board to refine its assessment of the outlook for growth and inflation and to make any adjustment to the stance of policy that may be appropriate,” RBA Governor Glenn Stevens said.

Economists said the remarks were a change from balanced comments in recent months, and with second quarter inflation data due out at the end of the month, the RBA might soon have the catalyst it needs to cut again.

“We believe it provides the necessary wiggle room to cut the cash rate in the likely event that the June quarter CPI is on the low side,” said Michael Workman, senior economist at the Commonwealth Bank of Australia.

In local data out Tuesday, Australia’s trade deficit blew out to $2.2 billion in May, with economists expecting a deficit of $1.5 billion.

And retail spending rose 0.2 per cent in the month, which also missed economists’ predictions.

Commonwealth Bank currency strategist Joe Capurso said market attention would be focused on the UK overnight, where services industry figures and a key post-Brexit financial stability review are due to be released.

- Dow Jones newswires, with AAP