$A rises on lack of RBA guidance

Petrina Berry

(Australian Associated Press)

The Australian dollar first dipped but then rose on the Reserve Bank’s minutes to finish afternoon trade higher.

At 1700 AEST on Tuesday, the local unit was trading at 77.11 US cents, up from 76.69 cents on Monday.

The currency slipped after the Reserve Bank released, at 1130 AEST, the minutes from the August board meeting that resulted in a cash rate cut.

The minutes failed to provide guidance on future interest rate moves, pushing the currency slightly lower, but by afternoon trade it was back in positive territory, RBC Capital Markets senior economist Su-Lin Ong said.

“The reaction to the minutes has been limited because there was no new news,” she said.

“But most notable was that it did not say much about the currency despite its general strength and this gave it the green light to climb a little higher.”

Ms Ong said traders were waiting for official Australian wages growth data on Wednesday and official employment figures due Thursday.

A string of US data, including inflation data for July, is due on Tuesday night, Australian time.

Ms Ong said the most crucial data that could shape the interest rate outlook for the US and affect currency movements will be the inflation numbers.


One Australian dollar buys:

* 77.11 US cents, from 76.69 cents on Monday

* 77.31 Japanese yen, from 77.57 yen

* 68.58 euro cents, from 68.66 euro cents

* 106.17 NZ cents, from 106.63 NZ cents

* 59.78 British pence, from 59.29 British pence


* The spot price of gold in Sydney at 1700 AEST was $US1,347.40 per fine ounce, up 7.70 US cents on Monday’s price of $US1,339.70.


* CGS 5.25pct March 2019, 1.389pct, from 1.398pct on Monday

* CGS 4.25pct April 2026, 1.878pct from 1.893pct

Sydney Futures Exchange prices:

* September 2016 10-year bond futures contract was at 98.110 (implying a yield 1.890 per cent), unchanged from Monday.

* September 2016 3-year bond futures contract was at 98.640 (1.360 per cent), up from 98.620 (1.380 per cent).

(*Currency closes taken at 1700 AEST previous local session, bond market closes taken at 1630 AEST previous local session)

Source: IRESS



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