2012-10-16 08:20:22Roosevelt

Dollar rises ahead of RBA minutes

The Australian dollar is higher on improved US data and ahead of a release of board meeting minutes from the Reserve Bank of Australia (RBA).


At 7am AEDT on Tuesday, the currency was trading at $US1.0255, up from $US1.0223 at Monday’s close.


BK Asset Management managing director Kathy Lien said a strong reading for US data overnight had provided support for the Australian dollar.


‘‘US retail sales data was quite strong overnight, and that’s driving a rally in risk appetite, with US stocks rising as well,’’ she said.


Advertisement ‘‘Being a risk currency, the Australian dollar has benefited from better Chinese and US data over the past 24 hours.’’


Retail sales in the US rose 1.1 per cent in September, after a revised 1.2 per cent in August, according to data released overnight.


Ms Lien said the release on Tuesday of minutes from the RBA’s October meeting would be well-watched by the market for clues on how the bank could move in the future.


‘‘I think the risk is to the upside,’’ she said.


‘‘While there’s a very good chance the RBA will be dovish, given their rate cut decision earlier this month, I think they will avoid dropping hints about their future monetary policy.


‘‘They may want to wait and see the last bit of Chinese data before the leadership change, in particular the Chinese GDP (gross domestic product) numbers.’’


At its monthly board meeting on October 2, the RBA announced it had cut the cash rate by a quarter of a percentage point to 3.25 per cent