The Australian dollar is slightly higher, as the market continues to speculate about a rate cut at the Reserve Bank of Australia’s (RBA) October board meeting and interest rate decision.
At 1700 AEST on Tuesday, the local currency was trading at 104.26 US cents, up from 104.13 cents on Monday.
St George chief economist Hans Kunnen said the Aussie dollar had experienced a rally early in the morning, before softening slightly in the afternoon session.
“I’m not sure why it weakened, as there’s been little significant data out today,” he said.
“It just appears to have reached a certain point, and then softened in the afternoon.”
While many investors have already priced in their expectations for the RBA’s rate decision, it is still an event likely to influence the market this week.
On Tuesday, the RBA released its twice-yearly Financial Stability Report, which gave a mostly positive reading of the domestic banking sector and consumer spending habits.
“The RBA was very positive on the Australian banking system, on banking profitability and regulation, so that can’t have had much negative impact on the market,” Mr Kunnen said.
