The Australian dollar is treading water as markets await the Reserve Bank’s board meeting, where interest rates are expected to remain on hold.

At 7.00am (AEDT) on Tuesday, the local unit was trading at US71.37c, down fractionally from US71.38c on Monday.

Nomura rate strategist Andrew Ticehurst says the RBA will be reluctant to use up some of its remaining “ammunition”.

“The RBA is uncertain that a rate cut could actually achieve a meaningful result and is not yet convinced that the economy requires more policy support,” he said.

Source: Markets Spectator