Dollar lower ahead of key events

THE Australian dollar is slightly lower ahead of Tuesday's US president election and the Reserve Bank of Australia (RBA) interest rate decision.

dollar

THE Australian dollar is slightly lower ahead of Tuesday's US president election and the Reserve Bank of Australia (RBA) interest rate decision.

At 12.00 AEDT on Monday, the local unit was trading at 103.52 US cents, down from 103.85 cents on Friday.

Since 07.00 AEDT on Monday, the Australian dollar traded between 103.33 US cents and 103.68 cents.

The RBA board meets on Tuesday, and 12 of the 15 economists surveyed by AAP last week said they believed the cash rate will be cut by a quarter of a percentage point, to three per cent.

The US presidential election result is expected to be announced on Wednesday, Australian time.

Easy Forex currency dealer Tony Darvall said the Australian dollar is trading in a tight range ahead of the week's key events.

"This week is going to be very volatile, there's no question," he said.

"Given that we've got the RBA and a US election tomorrow you expect the market to be pretty contained.

"It's very hard for it to rally ahead of what is about to come out."

Mr Darvall said the euro has fallen against the Australian and US dollars, which could bring other risk currencies lower.

"It's big enough to bring everything down," Mr Darvall said.

"We will find out that today, what the situation is with that fall, if the market is in a downtrend."

Meanwhile, Australian bond prices were flat to higher at noon.

At 12.00 AEDT on Monday, the December 10-year bond futures contract was trading at 96.920 (implying a yield of
3.080 per cent), up from 96.905 (3.095 per cent) on Friday.

The December three-year bond futures contract was at 97.410 (2.590 per cent), level with its previous local close.