The Australian dollar is lower in cautious trade ahead of the release of the minutes of the Reserve Bank of Australia’s November board meeting.
At 0700 AEDT on Tuesday, the local unit was trading at 93.75 US cents, down from 94.02 cents on Monday.
On November 5, the RBA kept the cash rate unchanged at 2.5 per cent but said the value of the Australian dollar was “uncomfortably high”, an indication there could be another interest rate cut next year.
OM Financial senior client adviser Stuart Ive said the RBA minutes were expected to contain more negative comments about the currency.
“It’s going to be hard for the Australian dollar to gain traction ahead of the policy minutes,” he said from Auckland.
“There’s bound to be some suggestion that the fundamentals do not weigh up to where the currency is.
“So, the markets are just a little bit cautious ahead of that.”
The US stockmarket hit new records overnight but, Mr Ive said, the Australian dollar failed to benefit from the Wall Street rally.
The Dow Jones Industrial Average passed the 16,000 points for the first time and the more broadly based S&P 500 made its debut above 1,800 points.
Mr Ive said he expected the Australian dollar to trade between 93.20 and 94 US cents on Tuesday.
AAP
