Dollar falls but stays above 103 US cents

THE Australian dollar is slightly lower but has managed to stay above 103.00 US cents as expectations of a November interest rate cut ease.

dollar

THE Australian dollar is slightly lower but has managed to stay above 103.00 US cents as expectations of a November interest rate cut ease.

At 0700 AEDT on Friday, the local unit was trading at 103.38 US cents, down from 103.76 cents on Thursday.

Bank of New Zealand currency strategist Mike Jones said the Australian dollar was well-supported but had slipped a little in late overnight trade.

"The Aussie dollar has been pushed a little lower in line with the late sell-off in US equity markets," he said from Wellington.

"If you look through the volatility, it has been a night of consolidation for the Aussie dollar."

Mr Jones said the Australian dollar was staying above 103.00 US cents because of an increasing belief the
Reserve Bank of Australia (RBA) won't cut the cash rate at its board meeting on Melbourne Cup day.

"We are continuing to see interest rate markets price out some of the easing for the RBA," he said.

"That has blown some wind into the Aussie dollar's sails and kept it above 103.00 US cents."

Mr Jones said there was little economic data expected in the next 24 hours and he didn't expect any large movements in the Australian dollar

"It looks like there will be a little bit of hedging and that should keep the Aussie dollar rangebound through the session," he said.