The Australian dollar is lower against a strengthening US dollar ahead of the Reserve Bank of Australia’s interest rate announcement and retail trade figures.

At 0635 AEST on Tuesday, the Australian dollar was worth 76.59 US cents, down from 76.73 US cents on Monday.

Westpac’s Imre Speizer said the US currency had strengthened overnight, along with the oil price and equities.

“The US dollar index is up 0.6 per cent on the day. (The ) AUD fell from 0.7675 to 0.7645,” he said in a morning note.

Tuesday’s key event risk would be the RBA’s interest rate decision and retail sales figures, with any movement in the Aussie dollar limited.

“The RBA policy decision is universally expected to be on hold with the focus on the governor’s statement.

“We expect some positive tweaks to assessments of the labour market, but overall no substantive changes given conditions are still evolving in the housing market.

“(The Australian dollar likely would be) capped by 0.7710 for now.”

AAP

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