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FOREX-Australian dollar inches down as RBA awaited

Published 05/07/2016, 10:19 am
Updated 05/07/2016, 10:20 am
© Reuters.  FOREX-Australian dollar inches down as RBA awaited
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* RBA expected to hold steady, but could shift to easing bias

* Major currencies tread water after U.S. holiday

By Lisa Twaronite

TOKYO, July 5 (Reuters) - The Australian dollar inched lower on Tuesday as investors awaited a monetary policy decision later in the session, while major currencies continued to tread water with U.S. markets shut on Monday for Independence Day.

The Aussie inched down 0.2 percent to $0.7525 AUD=D4 , though it remained within site of Monday's more than one-week high of $0.7545.

The Reserve Bank of Australia is widely expected to skip a chance to ease again as it awaits second quarter consumer price data due on July 27, but markets are betting on a cut in August given low inflation and uncertainty following Britain's vote to leave the European Union. 37 economists polled by Reuters last week expected the RBA to keep the cash rate unchanged at a record low 1.75 percent. AU/INT

Possible policy paralysis after no clear winner emerged from a weekend election also threatens to weigh on the Aussie. is not a direct threat to Australia, but over time the hit to investment and risk-taking sentiment may weigh on commodity prices, adding to the pressure on the RBA," Marshall Gittler, head of investment research at FXPrimus, said in a note.

"At the June meeting, the RBA basically kept a neutral stance and made no comment about which way the next move might be. The market will be focused on whether the statement continues that neutral stance or moves to an outright easing bias," Gittler said.

Brexit has ramped up the urgency for some Asian central banks to ease monetary policy, as a prolonged period of uncertainty threatens a wider downshift in trade and investment. timing of Britain's actual exit from the EU remains unclear, and against this backdrop, investors have begun to hope for additional stimulus and UK corporate tax cuts to blunt the impact of the move. edged down 0.1 percent to $1.3277 GBP=D4 , but remained above last week's 31-year trough of $1.3122 plumbed in the wake of the Brexit vote.

The U.S. dollar index, which tracks the greenback against a basket of six rival currencies, edged down 0.1 percent to 95.581 .DXY .

The euro inched down 0.1 percent $1.1140 EUR= .

The yen was higher, with the euro falling 0.3 percent to against its Japanese counterpart to 114.07 yen EURJPY=R , and the dollar down 0.1 percent at 102.41 yen JPY= .

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