Playing it safe


moneyThe Australian dollar is slightly lower as traders move out of riskier assets, playing it safe ahead of a big day of economic events.

Trading volumes were down during the overnight session because US markets were closed for the Labor Day public holiday.

At 0700 AEST on Tuesday, the local unit was trading at 89.78 US cents, down from 89.84 cents on Monday.

Since 1700 AEST on Monday, the Australian dollar traded between 89.24 and 90.15 US cents.

OM Financial senior client adviser Stuart Ive said the Australian dollar got some support early in the overnight session from the positive Chinese and European manufacturing figures.

HSBC released its Chinese manufacturing index on Monday, showing the first month of expansion in activity in the sector since April.

Official data out overnight showed that UK and euro zone manufacturing activity also expanded in August.

“Looks like the world’s manufacturing at the moment is on the move up,” Ive said.

“That helped support industrial metals prices overnight, so copper and silver have done exceptionally well, while gold is fractionally down.

“Currently, the Australian dollar is a little bit lower leading into such a big day.”

In Australia, official retail spending figures for July and the June quarter current account data will be released late morning.

In the afternoon, the Reserve Bank of Australia winds up its monthly board meeting.

The RBA is widely expected to keep the cash rate unchanged at 2.5 per cent, after making a quarter of a percentage point cut in August.


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