Aussie dollar eases from five-week highs

THE Australian dollar eased from more than one-month highs with trading expected to be volatile in a week when both the US and Australian central banks hold policy meetings and US midterm elections preoccupy financial markets.

The Australian dollar was at 72.04 US cents last night, eas- ing from Friday’s 72.59 US cents, which was the highest since September 27, after solid US jobs data cemented expectations for a December rate rise.

The Reserve Bank of Australia meets today when it is widely expected to keep interest rates unchanged at 1.5 per cent for 27 consecutive policy meetings.

The RBA will publish its official forecasts for inflation and economic growth on Friday.

However, the market is hoping to see a more hawkish tone in its comments after the meeting, failing which there could be a sell off in the currency, analysts said.

Elsewhere, investors keenly await Chinese President Xi Jinping’s speech later in the day for any clues on the course of an ongoing Sino-US trade war, with markets reacting to even the most minor piece of news in the dispute.

Global financial markets are also expected to be jittery ahead of today’s US congressional midterm elections.

Opinion polls show a strong chance that the Democratic Party could win control of the House of Representatives after two years of wielding no practical political power in Washington, with President Donald Trump’s Republican Party likely to hold the Senate.

Australian government bond futures slipped, with the three-year bond contract off two ticks at 97.860.

The 10-year contract fell three ticks to 97.265. Reuters