Dollar higher ahead of rates decision

THE Australian dollar is a touch higher in quiet trade as investors await the Reserve Bank of Australia's interest rate decision.

Reserve Bank of Australia, RBA

THE Australian dollar is a touch higher in quiet trade as investors await the Reserve Bank of Australia's interest rate decision.

At 12.00pm AEDT on today, the local unit was trading at 103.74 US cents, up from 103.68 cents on Monday.

Since 07.00am AEDT, the Australian dollar traded between 103.60 US cents and 103.85 cents.

The RBA board meets today and while most of the market is expecting its interest rate to be cut from its current level of 3.25 per cent, most agree it will be a close call.

In addition to that, the US presidential election result should be known some time on Wednesday, Australian time, and that is also expected to be a close result.

Forex.com research analyst CHRIS TEDDER says the Australian dollar has been trading in a tight range ahead of these two events.

He says this week is one of the biggest weeks they've seen in recent memory in terms of headline announcements.

He says there is just so much happening that could impact the Aussie dollar, the big ones are the RBA and the US elections.

"Traders at the moment have made up their minds and set themselves for the RBA decision."

Other market events this week that Mr Tedder says could move the Australian dollar include the European Central Bank meeting on Thursday, the handover of the Chinese presidency to Xi Jinping and the Greek
parliament votes on further austerity measures, which will get them more bailout funds.

Meanwhile, Australian bond prices were mixed at noon.

At 12.00pm AEDT, the December 10-year bond futures contract was trading at 96.925 (implying a yield of 3.075 per cent), up from 96.920 (3.080 per cent) on Monday.

The December three-year bond futures contract was at 97.390 (2.610 per cent), down from 97.420 (2.580 per cent).