Dollar steady ahead of rate decision

THE Australian dollar is steady against its US counterpart ahead of the Reserve Bank of Australia’s interest rate decision later in the day.

THE Australian dollar is steady against its US counterpart ahead of the Reserve Bank of Australia’s interest rate decision later in the day.

At 0635 AEST on Tuesday, the Australian dollar was worth 76.05 US cents, down fractionally from 76.06 US cents on Monday.

Westpac’s Imre Speizer said as risk aversion had permeated financial markets overnight.

The US dollar index had risen 0.2 per cent against a basket of currencies to a two-week high, while the Australian dollar had probed lower to 75.91 early in the London session before consolidating, he said.

“The RBA policy (interest rate) decision is expected to be firmly on hold (as) concerns about a build-up of risks associated with the housing market effectively rule out further cuts,” he said in a note on Tuesday.

“The February trade balance is expected to be a $2.8 billion surplus after it narrowed to $1.3 billion in January from $3.5 billion in December, in part due to a spike in imports.”

He said he expected the local currency to range around 76 US cents with the RBA’s rate decision, at 1430 AEST, the key driver.

CURRENCY SNAPSHOT AT 0635 AEST ON TUESDAY

One Australian dollar buys:

* 76.05 US cents, from 76.06 on Monday

* 84.35 Japanese yen, from 84.82 yen

* 71.26 euro cents, from 71.28 euro cents

(*Currency closes taken at 1700 AEST previous local session)

Originally published as Dollar steady ahead of rate decision