The australian dollar is lower

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THE Australian dollar has weakened as investors await key inflation data later this week that could determine whether the central bank cuts the interest rate next month.

At 8.30am on Monday, the local unit was trading at 74.65 US cents, down from 74.88 cents on Friday.

We expect both the RBA and RBNZ (Reserve Bank of Australia and the Reserve Bank of New Zealand) to cut their policy rates in August, Westpac strategist Imre Speizer said.

The uncertainty generated by Brexit plus further RBA easing should be negative for the AUD (Australian dollar) during the months ahead, he added.

The Australian Bureau of Statistics will release the Consumer Price Index data on Wednesday.

Investors expect the RBA to cut its key interest rate next month but the central bank is awaiting more information, including CPI.

The RBAs July meeting minutes, released last week, confirmed the central bank has a soft easing bias.


One Australian dollar buys:

* 74.65 US cents, from 74.81 cents on Friday

* 79.30 Japanese yen, from 79.29 yen

* 68.03 euro cents, from 67.87 euro cents

* 106.69 New Zealand cents, from 106.90 NZ cents

* 56.79 British pence, from 56.50 pence Government bond yields:

* CGS 5.25pct March 2019, 1.4864pct, from 1.4764pct

* CGS 4.25pct April 2026, 1.9145pct, from 1.9045pct Sydney Futures Exchange prices:

* September 2016 10-year bond futures contract, was at 98.075 (implying a yield 1.925 per cent), up from 98.08 (1.92 per cent) on Friday

* September 2016 3-year bond futures contract, at 98.590 (1.410 per cent), unchanged.

(*Currency closes taken at 5pm previous local session, bond market closes taken at 4.30pm local session)

Source: IRESS