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$A range trading ahead of RBA decision

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Published on: Monday, February 03, 2014

The Australian dollar is trading within a narrow range as investors prepare for Tuesday's Reserve Bank of Australia cash rate decision.

At 1200 AEDT on Monday, the Australian dollar was trading at 87.62 US cents, down from 87.68 cents on Friday.

The Australian dollar had a small dip on Monday following weaker-than-expected data showing building approvals fell 2.9 per cent in December.

But the market shrugged off that news as investors with short positions bought back the Aussie dollar ahead of the RBA's February meeting, Easy Forex currency dealer Tony Darvall said.

"The Aussie dollar is holding against the US dollar," he said.

"The RBA is still the focus and we may see a bit of short covering ahead of that.

"If they indicate that there aren't more rate cuts to come, you may see a more sustained rally."

Meanwhile, Australian bond futures prices were mixed.

At 1200 AEDT on Monday, the March 2014 10-year bond futures contract was trading at 96.065 (implying a yield of 3.935 per cent), unchanged from Friday.

The March 2014 three-year bond futures contract was at 97.110 (2.890 per cent), down from 97.140 (2.860 per cent).


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