Australian dollar steady ahead of RBA minutes

The Australian dollar is sitting tight today due to a lack of economic news and awaiting tomorrows minutes meeting from the RBA.

At 12.30am (AEDT) the local currency was trading at US77.83c slightly lower from US77.83c on Friday.

With markets in the US closed today traders are choosing to sit on the sidelines for the all-important speech from the Australian central bank tomorrow.

The RBA unexpectedly cut rates a few weeks ago to 2.25% so tomorrow’s meeting will be eyed closely for any signs of a further rate cut.

The unemployment rate will be on the agenda with some like OM Financial senior client adviser Stuart Ive noting that the central bank stands ready to act if the job market deteriorates further

"The RBA stands willing to cut rates as the employment situation and the economy continue to stagger along," Mr Ive said.

Australia’s unemployment rate jumped from 6.1% to 6.4% from december through to January.

Bill Evans, Chief Economist at Westpac also noted there is a good chance that the RBA will cut rates again in March although the housing market may cause some concern,

“For now, we are comfortable to maintain our original call for a follow up move in March, particularly given the Bank’s comfort with its initiatives in the regulatory sphere. However we recognize that a perfectly respectable case can be made for the Bank to pause for a month or two to assess developments in the housing market.” he said.

“The most important point is that February is not the end of this rate cycle with another cut extremely likely over the next three months.”

“Consistent with our view that the interest rates are likely to move lower, and as suggested by the Statement on Monetary Policy, we expect the RBA to adopt an explicit easing bias.”