The Australian dollar is hovering amid belief among some economists that the Reserve Bank could cut interest rates to a new record low.
At 0700 AEDT on Tuesday, the local currency was trading at 77.69 US cents, down from 77.76 cents on Monday.
Eleven out of 17 economists surveyed by AAP expect the RBA will cut the cash rate to two per cent on Tuesday, following on from February’s 25 basis point cut to 2.25 per cent.
Commonwealth Bank, ANZ, Westpac and AMP Capital are among those forecasting a March cut, with the general consensus being the RBA tends to deliver reductions in pairs.
“The market remains convinced that the RBA will cut rates further… and that it may hint at additional easing later in the year,” BK Asset Management MD, Boris Schlossberg, said.
“The RBA is adamant at moving the exchange rate towards the 75 US cent figure and if it maintains a dovish posture on Tuesday, the Aussie could see more selling as the week progresses.”
National Australia Bank senior economist David de Garis said the market was pricing in a 58 per cent chance of a cut on Tuesday.
The RBA will deliver its decision at 1430 AEDT.
Until then, the market will be focused on a batch of data being released by the Australian Bureau of Statistics at 1130 AEDT, including building approvals, government finance statistics and balance of payments numbers.
AAP
