Australian dollar dips

The Australian dollar has fallen Wednesday, buying 70.11 US cents from 70.31 US cents on Tuesday.

Yesterday, the local currency stayed firm as markets priced in aggressive cuts in US interest rates.

The Australian dollar stayed firm as markets priced in aggressive cuts in US interest rates, even as events at home suggested domestic policy would likely be eased again in coming months.

The Aussie dollar held at 70.36 US cents on Tuesday, after minutes of the Reserve Bank of Australia’s July meeting showed it also stood ready to ease again “if needed” to support employment and economic growth. 

The bank cut its rates to a record low of 1.0 per cent early this month and futures markets are fully priced for another move to 0.75 per cent by early next year. 

Downside risks to the economy are continuing, including soft consumer spending, a deterioration in business conditions and a more uncertain global outlook,” said Janu Chan, a senior economist at St George Bank.

“The RBA is therefore expected to pull the rate cut trigger once again. We continue to favour the timing of such a move in November, but cannot rule out the RBA moving earlier.”

Bonds remain priced for an easing with yields on three-year paper down at 0.958 per cent and under the cash rate. 

The 10-year futures contract firmed 6.5 ticks on Tuesday to 98.6050, implying a yield of 1.395 per cent.

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