Dollar rises ahead of RBA decision

The Australian dollar has opened near 104.2 US cents as market players look ahead to the Reserve Bank of Australia’s interest rate decision.

At 0700 AEDT on Tuesday, the Australian dollar was at 104.22 US cents, steady with Thursday’s local close.

Australian markets were closed on Good Friday and Easter Monday.

During overseas trading, the Australian dollar dipped to a low of 103.87 US cents in response to some disappointing Chinese manufacturing data.

However, the currency reached a high of 104.39 US cents during Monday night’s (AEDT) New York session in response to some US dollar selling.

HiFX senior trader Stuart Ive said market players were looking ahead to the RBA’s interest rate decision due at 1430 AEDT.

While the central bank was widely tipped to keep the cash rate unchanged at three per cent, interest will be on governor Glenn Stevens’ accompanying statement for clues about the RBA’s thinking on the future direction of rates.

“All eyes are to the RBA this afternoon,” Ive said.

“I think they are going to say things have broadly picked up a little bit.

“But I expect the RBA to sit on the fence until some sustained growth globally comes into play.”

In addition to the RBA meeting, data on home sales, building approvals and retail sales are also due out during the shortened post-Easter trading week.

Ive said the recent data from Australia has been consistently improving. “In the past month in particular we have seen some pretty good numbers,” Ive said.

AAP

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