$A holds steady ahead of RBA meeting

The Australian dollar is hovering above 94 US cents ahead of Tuesday's Reserve Bank interest rate decision.

At noon on Monday, the Australian dollar was trading at 94.20 US cents, down from 94.36 cents on Friday.

The Australian dollar has been on a high since disappointing US economic data last week weakened the greenback.

Currency traders are now waiting on the RBA rates decision and the bank's accompanying statement, FXCM currency strategist Ilya Spivak said.

The RBA is widely expected to keep rates on hold at 2.5 per cent.

"July's meeting seems likely to offer more of the same," Mr Spivak said.


"Interestingly, the absence of a change in the RBA's posture may still carry important directional implications for the Aussie.

"Moving past the RBA announcement without material changes to the landscape may put a spotlight on the increasing disconnect between the exchange rate and relative policy bets, forcing the Aussie to correct downward."

Meanwhile, Australian bond futures prices were mixed.

The September 2014 10-year bond futures contract was trading at 96.465 (implying a yield of 3.535 per cent), up from 96.450 (3.550 per cent).

The September 2014 three-year bond futures contract was unchanged at 97.320 (2.680 per cent).