Dollar lower ahead of US Fed meeting

THE Australian dollar is lower amid investors jitters ahead of this week's US Federal Reserve meeting.

dollar

THE Australian dollar is lower amid investors jitters ahead of this week's US Federal Reserve meeting.

At 12pm AEST today, the local unit was trading at 92.92 US cents, down from 93.35 cents yesterday.

The local currency staged a brief rally after the release of the Reserve Bank's September meeting minutes at 11.30am AEST, reaching an intra-day high of 93.36 cents.

But the boost wore off, as caution ahead of the US Federal Open Market Committee's two-day meeting, tomorrow and Thursday, took its toll on the Aussie, Westpac senior currency strategist Sean Callow said.

"There was a pop higher on the initial reading of the RBA minutes and then it's come back down," Mr Callow said.

"The minutes were what we should have expected, the RBA are not firmly neutral, they did refer to the possibility of another rate cut but they're clearly not in a hurry.

"The weakness in Asian equities is having an impact on the Aussie, Shanghai is down, Korea is down, so there's a bit of regional nervousness and a fair bit of red ink around the region that looks to be taking a bit of an edge off the Aussie.

"The path of the Aussie into the weekend will be very heavily determined by what happens in the US and elsewhere."

Westpac economists maintained their forecast of another rate cut in November, Mr Callow said.

Meanwhile, Australian bond futures prices were lower.

The December 10-year bond futures contract was at 95.880 (implying a yield of 4.120 per cent), down from 95.935 (4.065 per cent) on Monday.

The December three-year bond futures contract was at 96.890 (3.110 per cent), down from 96.950 (3.050 per cent).

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