Australian Dollar Quiet Ahead of Policy Meeting

 
   


By James Glynn 
 

        SYDNEY--The Australian dollar was little changed in Asia Monday ahead of a week jammed with data and commentary from the central bank, beginning Tuesday with a monetary policy meeting.
        The Australian dollar was trading at US$0.7297 at 0615 GMT, up slightly from US$0.7283 late Friday.
        While economists don't expect the Reserve Bank of Australia to cut interest rates this month, many still expect an easing before the end of the year as the economy continues to grow slowly and inflation stays benign.
        Shane Oliver, chief economist at AMP Capital, said the risks of a further rate cut are considerable as investment remains weak and the economy remains at a crawl.
        Global factors are also likely to weigh heavily on the RBA and the Aussie dollar in coming months.
        Expectations for further China equity correction, declining commodity prices and the buildup to the U.S. Federal Reserve's liftoff should continue to weigh on the Aussie dollar sentiment, said Stephen Innes, senior trader at online currency trader OANDA Australia and Asia Pacific.
        Later this week, the government statistician will publish employment data for July, while the RBA will publish new economic forecasts on Friday.
        Will Richardson, currency strategist at Macquarie Bank says there is some weakness developing in the Australian dollar.
        "We would favor joining offers above US$0.7350 on the back of ongoing Chinese concerns, volatility in commodities, impending Fed hikes in the months ahead and an RBA that is likely to continue to talk down the currency," he said.
        Still, data on the day highlighted risks for the RBA in cutting rates further, with house prices in Sydney rising quickly in July.
        Sydney house prices jumped 5.4% in the second quarter, to be 18.4% higher from the same period a year earlier, said property research firm CoreLogic RP Data.
        -Write to James Glynn at james.glynn@wsj.com
        (END) Dow Jones Newswires
        August 03, 2015 02:32 ET (06:32 GMT)

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