Dollar higher ahead of RBA decision

THE dollar is up on global market moves, and ahead of a rate decision from the Reserve Bank of Australia.

THE Australian dollar is higher on global market moves, and ahead of a rate decision from the Reserve Bank of Australia (RBA).

At 12pm AEDT today, the currency was trading at 104.22 US cents, up from 104.06 US cents at yesterday's close.

Since 7am AEDT today, it has traded between 104.17 US cents and 104.35 cents.

CMC Markets foreign exchange dealer Tim Waterer said global data had influenced the currency overnight, but it was now firmly focused on a rate decision by the RBA, due this afternoon.

"Overnight, we had some sub-par US manufacturing data," he said. "That seemed to weigh mostly on the Greenback, so it allowed currencies like the euro and the Aussie to progress a bit higher."
 
"This morning, it's just a case of the Aussie treading water ahead of the RBA decision at 1430 (AEDT)."

An AAP survey of 15 economists showed that most expect the central bank to ease the cash rate by 0.25 per cent from its current position at 3.25 per cent.

Mr Waterer said this expectation meant the local currency would be unlikely to move if the RBA did cut.

"What could drag the currency down is the accompanying statement - if it hints at more cuts to come in the New Year," he said. "If they do sit on their hands this time around, there is more room to move for the Aussie dollar on the upside, and it could move half a cent higher."

Meanwhile, Australian bond futures prices were lower at noon. At 12pm AEDT today, the December 10-year bond futures contract was at 96.890 (implying a yield of 3.110 per cent), down from 96.935 (3.065 per cent) yesterday afternoon. The December three-year bond futures contract was trading at 97.380 (2.620 per cent), down from 97.420 (2.580 per cent).