The Australian dollar is steady against a stronger greenback which lifted following the US tax reform bill’s passage through the Senate.

At 0635 AEDT on Tuesday, the Australian dollar was worth 75.97 US cents, unchanged from Monday.

Westpac’s Imre Speizer says markets sentiment had remained elevated after the passage through the Senate of the Republican’s tax reform bill, giving President Donald Trump’s first legislative win on his term.

“Sentiment remained elevated following yesterday’s passage of tax reforms through the US Senate. The S&P500 is up 0.5 per cent to a fresh record high and the US dollar is stronger,” he said in a Tuesday morning note.

“The US dollar index is up 0.4 per cent on the day… (and the) AUD ranged sideways between 0.7580 and 0.7615.”

Also supporting markets were economic data.

“US factory orders fell 0.1 per cent in October, versus the -0.4 per cent expected, while shipments rose 0.6 per cent.

“Inventories rose 0.2 per cent, which left the I/S steady at 1.4 (and) durable goods orders for October were revised higher, to -0.8 per cent from -1.1 per cent.”

He said the key event risk for the local currency on Tuesday would be the Reserve Bank of Australia’s policy decision, which was expected to be to keep the interest rate on hold.

“It is unlikely that the statement will be materially changed, but a possible point of difference may be around the currency given that the AUD TWI (trade weighted index) has fallen back to near 2017 lows. ”

Third quarter national accounts data and retail sales figures would also be of interest.

He expected the Aussie dollar to be rangebound “between 0.7530 and 0.7645”.

The Aussie dollar is higher against the yen and the euro.

AAP

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