Australian dollar struggling ahead of RBA meeting

THE Australian dollar is struggling to hold above 77 US cents amid growing expectations of a rate cut on Tuesday. 

At 0645 AEDT on Monday, the March share price index futures contract was down 24 points at 5,518.

US economic growth came in at an annual rate of 2.6 per cent in the fourth quarter, well below the 5.0 per cent in the prior quarter.

Eurozone consumer prices fell by a record 0.6 per cent in January, confirming deflation could be taking hold for the long term, EU data showed.

In local economic news on Monday, the Reserve Bank of Australia’s index of commodity prices and the Australian Industry Group’s performance of manufacturing (PMI) index, both for January, will be released.

Meanwhile, the RP Data Core Logic Home Value Index and the TD Securities-Melbourne Institute’s inflation gauge both for January, are also due out.

In equities news, JB Hi-Fi and Argo Investments are expected to post half year results.

In Australia, the market on Friday posted a seventh straight day of gains as the Australian dollar fell ahead of a potential rate cut by the Reserve Bank.

The benchmark S&P/ASX200 index was up 18.8 points, or 0.34 per cent, at 5,588.3.

The broader All Ordinaries index was up 19.4 points, or 0.35 per cent, at 5,551.6.

At 0630 AEDT on Monday, the local currency was trading at 77.39 US cents, down from 77.91 cents on Friday.

Expectations are growing that the Reserve Bank of Australia will cut the cash rate to a new record low of 2.25 per cent when the board meets on Tuesday.