The Australian dollar is about a third of a US cent lower ahead of the central bank’s monthly interest rate decision.
At 1200 AEST on Tuesday, the currency was trading at 102.44 US cents, down from 102.72 US cents on Monday afternoon.
ANZ foreign exchange strategist Andrew Salter said the Australian dollar fell overnight amid expectations the Reserve Bank of Australia (RBA) may cut the cash rate or adopt a more dovish tone at its May board meeting.
The RBA will announce its interest rate decision at 1430 AEST.
“It (the Australian dollar) performed poorly against most currencies overnight,” he said.
“That has really come from growing market expectations that tha RBA will cut interest rates today.”
But, Mr Salter said, the currency had moved little during Tuesday’s morning session.
“There really hasn’t been much trade in the currency. Most positions seem to be positioned for the RBA today.”
All 13 economists surveyed by AAP last week expected the RBA to keep the cash rate unchanged at three per cent.
Meanwhile, Australian bond futures prices were mixed at noon.
At 1200 AEST on Tuesday, the June 10-year bond futures contract was trading at 96.870 (implying a yield of 3.130 per cent), down from 96.875 (3.125 per cent) from Monday afternoon.
The June three-year bond futures contract was at 97.440 (2.560 per cent), up from 97.430 (2.570 per cent).