Dollar steadies, Aussie slips as RBA looms
dollar was firm on Tuesday and the Aussie under a little pressure as traders watched out for the Reserve Bank of Australia's interest rate decision with bets that rates may have peaked.
The Aussie was 0.5% lower at $0.6431 in early trade. Softer than expected inflation data for July has markets all but certain the cash rate will stay on hold at 4.1% when the RBA announces its decision in the next few hours, far lower than where U.S.
overnight rates are at about 5.25-5.5%.
The meeting is Governor Philip Lowe's last before Michelle Bullock takes over, and focus will be on what can be gleaned from the outlook. Australia cut its wheat export forecast on Tuesday, though current account data showed that for the second quarter volumes for all exports helped to boost the economy.
Currency markets had been steady overnight, with volumes lightened by a U.S.
holiday and with little economic data to gauge whether global hiking cycles might also be at an end.
The euro drifted higher from recent lows and was steady at $1.0793 early in the Asia session. U.S.
Treasuries opened lower in Asia, after the cash market was closed on Monday, with 10-year yields up 3 basis points to 4.20%.
The yen dipped overnight and analysts see it grinding toward 150 per dollar unless there is a sharp change in the gap between Japanese yields, pegged near zero, and U.S. yields comfortably above 4%.
