Investing.com - The Australian dollar dropped to one-week lows against its U.S. counterpart on Tuesday, after the Reserve Bank of Australia left interest rates unchanged and said that the nation's currency is overvalued.
AUD/USD hit 0.9286 during late Asian trade, the pair's lowest since August 26; the pair subsequently consolidated at 0.9292, retreating 0.43%.
The pair was likely to find support at 0.9269, the low of August 26 and resistance at 0.9352, the session high.
At its monthly policy meeting, the RBA held its benchmark interest rate at a record-low 2.50%, in a widely expected move and said that the overvalued Australian dollar is weighing on efforts to support growth.
RBA Governor Glenn Stevens said the Australian dollar "remains above most estimates of its fundamental value" and that it "is offering less assistance than would normally be expected in achieving balanced growth in the economy."
Separately, official data showed that building approvals rose 2.5% in July, beating expectations for an increase of 1.5%. The change of building approvals in June was revised to a 3.8% decline from a previously estimated 5.0% drop.
Meanwhile, investors continued to monitor developments in Ukraine after European Union leaders threatened over the weekend to impose a new round of sanctions on Russia if Moscow does not scale back its involvement in the conflict in eastern Ukraine.
The Aussie was lower against the euro, with EUR/AUD gaining 0.41% to 1.4126.
Later in the day, the Institute of Supply Management was to publish a report on U.S. manufacturing activity.