With the Reserve Bank of Australia expected to keep its benchmark rate unchanged on Tuesday, market watchers turned their attention to possible comments the central bank may make about the local currency.
The Australian dollar climbed from $0.76 to above $0.80 over the last month, partly due to the weakness in the greenback.
“With mining investment still falling, the consumer under pressure and housing construction looking like it is at or close to peaking we need a contribution to growth from trade exposed sectors like tourism, higher education, manufacturing and farming but a rising Australian dollar will work against that,” Shane Oliver, head of investment strategy and chief economist at AMP Capital, wrote in a note.
“What’s more the strength in the Australian dollar will only put more downward pressure on inflation. All of which makes more RBA attempts to jawbone the Australian dollar back down more likely,” he added.
The central bank’s monetary policy statement is due 12:30pm HK/SIN. The RBA has kept the cash rate at a record low of 1.5 percent since August 2016.