The Australian dollar is grinding higher

Photo by David Rogers/Getty Images

The Australian dollar rose modestly in overnight trade, largely ignoring weakness in US stocks and a stronger-than-expected US manufacturing PMI report for September that saw the odds of a US rate hike in December firm slightly.

The AUD/USD eventually closed Monday’s session buying .7670, having risen to as high as .7681 in European trade.

Richard Grace, chief currency strategist at the Commonwealth Bank, put the gain in the Aussie down to strength in crude prices, a recovery in European stocks along with solid Chinese economic data released over the weekend.

“Higher crude oil prices, the weekend’s stronger Chinese September non-manufacturing PMI, and better performance on European equity markets has helped support AUD,” he wrote in his Tuesday morning note.

AUD/USD 5-Minute Chart

With many parts of Australia returning to work following the Labour Day long weekend, the domestic economic data calendar is bulging at the seams on Tuesday, culminating with the release of the RBA’s October monetary policy decision at 2.30pm AEDT this afternoon.

“AUD/USD will be influenced today by Dr Philip Lowe’s first meeting as RBA Governor,” says Grace.

“The accompanying statement is likely to have a few more wording changes than usual. Nevertheless, based on recent commentary, the central underlying neutral policy stance, highlighting an improving domestic economic outlook, subject to subdued inflationary pressures, should remain largely unchanged.”

For those looking for further information before the decision arrives, this 10-second guide will help bring you up to speed.

Before the arrival of the RBA rates decision, markets will also receive Australian August building approvals, September job ads, and the latest weekly reading on Australian consumer confidence from ANZ-Roy Morgan.

The RBA’s September RBA commodity price index, arriving at 4.30pm AEST, will also get some attention, particularly given the surge in coking and thermal coal prices seen in recent weeks.

“It’s not one that gathers any market attention, but is one that’s a high-frequency tracker of Australia’s terms of trade, crystallising recent commodity prices into an index that mimics export ‘prices received’,” says David de Garis, senior economist at the NAB.

Outside of domestic data releases, there’s plenty of economic data and central bank speak arriving later in the session, although none appears likely to move the Aussie significantly one way or another.

Here’s the Australian dollar scoreboard as at 8.05am AEDT.

  • AUD/USD 0.7679 , 0.0009 , 0.12%
  • AUD/JPY 78.04 , 0.11 , 0.14%
  • AUD/CNH 5.1244 , 0.0031 , 0.06%
  • AUD/EUR 0.6847 , 0.0007 , 0.10%
  • AUD/GBP 0.5983 , 0.0012 , 0.20%
  • AUD/NZD 1.0541 , 0.0005 , 0.05%

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