Australian dollar steadies ahead of RBA, kiwi braces for election risk

The Australian dollar traded near $0.7030 on Monday as markets awaited the Reserve Bank of Australia’s Tuesday decision, while New Zealand’s currency weakened ahead of Saturday’s election. Business Recorder reported that 30 of 32 economists surveyed by Reuters expect an RBA rate increase, which would lift the cash rate to 4.85%, its highest level since 2008.

A quarter-point rise is priced at nearly 90%, following hawkish signals from the central bank, though traders are also watching for guidance on further tightening. The New Zealand dollar fell 0.2% to $0.5616 after the Reserve Bank of New Zealand kept its rate at 2.75% last week; local employment figures due Wednesday and the election could influence expectations for rates and government bond yields.