Dollar dips as market waits on RBA
The Australian dollar has fallen slightly before Tuesday's Reserve Bank board meeting, amid anticipation the central bank may lean towards another rate cut.
Late on Friday, it was trading at US93.61¢, down from US93.89¢ on Thursday. A recent rally by the Aussie means the RBA could adopt an easing bias when it releases its statement accompanying the cash rate decision on Tuesday, Easy Forex currency dealer Tony Darvall said.
The Australian dollar was below US90¢ at the beginning of this month, but rallied above US95¢ after the US Federal Reserve decided not to taper its economic stimulus program.
"The RBA is likely to be dovish, given the rise in the Aussie dollar," Mr Darvall said.
"No one really expects them to cut, but if they come out with an obvious dovish bias or they explicitly talk about the Aussie dollar being important for the continued strengthening of the Australian economy or something along those lines - that sort of talk will get the market selling.
"In anticipation of that, there may be selling and at the moment, the Aussie is under pressure."
The Aussie was at 92.30 Japanese yen, down from Thursday's close of 92.91 yen, and at 69.37 euro cents, down from 69.45 euro cents.
Australian bond futures prices were higher, driven by the US debt ceiling debate, which could force a US government shut-down.
The US Congress and the White House are negotiating to raise the US government's debt ceiling and reach a short-term budget agreement before the financial year ends on September 30.
Failure to reach an agreement could force parts of the US government to be shut down.
Deutsche Bank fixed income strategist David Plank said the bond market rebounded on concerns over the conversations over the weekend in the US.
The December 10-year bond futures contract was trading at 96.085 (implying a yield of 3.915 per cent), up from 96.060 (3.940 per cent) on Thursday.
The December three-year bond futures contract was at 97.090 (2.910 per cent), up from 97.070 (2.930 per cent).