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Aussie dollar flat as traders await RBA policy decision

Xinhua, March 1, 2016 Adjust font size:

The Australian dollar remained relatively stable overnight as traders await Tuesday's central bank policy decision despite some intra-session volatility.

At the Asian open on Tuesday, the local unit was trading at 71.37 U.S. cents, slightly down from 71.38 U.S. cents at Monday's close. By 0945 local time (AEDT), the Australian dollar had marginally lifted to 71.41 U.S. cents.

The Aussie experienced some intra-session volatility overnight as a strengthening greenback weighed, however the cut to the Reserve Ratio Requirement (RRR) of Chinese banks by the Peoples Bank of China announced early in the European session gave the unit a lift.

"In the short term, PBoC's latest RRR cut will likely support risk sentiment, the Australian dollar and commodity prices as participants ramp-up odds that more aggressive stimulus measures may be in the pipeline," Commonwealth Bank of Australia senior currency strategist Elias Haddad said.

The Australian dollar may suffer more volatility on Tuesday with Reserve Bank of Australia's policy announcement at 1430 local time following China's manufacturing Purchasing Managers Index, providing downside risk.

The RBA is expected to keep its conditional easing bias, however interest will be on the central bank's assessment of the global economy and financial market conditions, Haddad said. Endit