Investing.com - The Australian dollar edged higher against its U.S. counterpart on Tuesday, but gains were expected to remain limited after the Reserve Bank of Australia left interest rates unchanged but also said the decline in the nation's currency was insufficient to spur growth.
AUD/USD hit 0.8786 during late Asian trade, the pair's highest since October 3; the pair subsequently consolidated at 0.8781, adding 0.19%.
The pair was likely to find support at 0.8649, Monday's low and resistance at 0.8827, the high of October 2.
In a widely expected move, the RBA held its benchmark interest rate at 2.50% but also reiterated that the Australian dollar's strength continues to dampen growth.
"The exchange rate has declined recently, in large part reflecting the strengthening U.S. dollar, but remains high by historical standards," RBA Chairman Glenn Stevens said.
Meanwhile, the greenback remained supported after the Labor Department reported on Friday that the U.S. economy added 248,000 jobs in September, well ahead of forecasts for jobs growth of 215,000. The unemployment rate ticked down from 6.0% to 5.9%, the lowest level since July 2008.
The data added to the view that the strengthening economic recovery may prompt the Federal Reserve to raise interest rates sooner than markets are expecting.
The Aussie was higher against the euro, with EUR/AUD retreating 0.43% to 1.4378.