Currency dealers have shed Australian dollars,
believing the reserve bank may signal, in its board meeting minutes, a
willingness to cut the cash rate.
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At 0700 (AEST), the local unit was trading at 102.25 US cents, down from 102.45 US cents on Monday.
Since 1700 (AEST) on Monday, the local unit has traded between 101.64 US cents and 102.67 US cents.
At 1130 (AEST) on Tuesday, the Reserve Bank of Australia (RBA) is due to release the minutes of its September board meeting in which it kept the cash rate at 4.75 per cent.
GFT Forex director of currency research Kathy Lien said traders had sold-off on their Australian dollars anticipating the RBA would signal a dovish outlook on interest rates.
"The central bank is not really talking about cutting rates but the market is (pricing in) a 50-basis-point rate cut by the end of the year," Ms Lien said.
"So, everyone will be looking to the RBA minutes to see if there's any increased willingness by the central bank to lower the rate.
"And, if they see that, they are going to punish the Australian dollar significantly and possibly push it down to a fresh one-month low against the US dollar."
She said the Australian dollar was the worst-performing currency against the US dollar overnight on concerns that Greece may soon default on its debt repayment.
Greece is continuing talks with the International Monetary Fund (IMF) and the European Union (EU) after being warned to tighten austerity measures and ramp up state asset sales to secure rescue funds and stave off bankruptcy early next month.
Greek Finance Minister Evangelos Venizelos held a conference call late on Monday with the heads of mission from the EU, IMF and European Central Bank to hammer out a response to serious slippage from agreed budget targets.
20/09/2011 09:43Sydney, Australia.
20 September,2011
Since 1700 (AEST) on Monday, the local unit has traded between 101.64 US cents and 102.67 US cents.
At 1130 (AEST) on Tuesday, the Reserve Bank of Australia (RBA) is due to release the minutes of its September board meeting in which it kept the cash rate at 4.75 per cent.
GFT Forex director of currency research Kathy Lien said traders had sold-off on their Australian dollars anticipating the RBA would signal a dovish outlook on interest rates.
"The central bank is not really talking about cutting rates but the market is (pricing in) a 50-basis-point rate cut by the end of the year," Ms Lien said.
"So, everyone will be looking to the RBA minutes to see if there's any increased willingness by the central bank to lower the rate.
"And, if they see that, they are going to punish the Australian dollar significantly and possibly push it down to a fresh one-month low against the US dollar."
She said the Australian dollar was the worst-performing currency against the US dollar overnight on concerns that Greece may soon default on its debt repayment.
Greece is continuing talks with the International Monetary Fund (IMF) and the European Union (EU) after being warned to tighten austerity measures and ramp up state asset sales to secure rescue funds and stave off bankruptcy early next month.
Greek Finance Minister Evangelos Venizelos held a conference call late on Monday with the heads of mission from the EU, IMF and European Central Bank to hammer out a response to serious slippage from agreed budget targets.
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