Rates At 0540 GMT Latest Change AUD/USD 1.0469 +0.66% AUD/JPY 79.68 +0.48% 6.50% May, 2013 4.0249% +0.0167 4.50% Mar, 2020 4.4412% +0.0175 10-Yr Spread To U.S. +227 bps +1 bps SFE Dec 3-Year Futures 96.07 -0.02 SFE Dec 10-Year Futures 95.45 -0.02 SYDNEY (Dow Jones)--The Australian dollar Tuesday continued to trade around its highest level since early September as hopes remained buoyed that euro-zone policy makers would announce significant measures later this week to bolster the region's banks and Greece. European leaders are considering a plan to boost the firepower of the European Financial Stability Facility to more than EUR1 trillion, according to a report by Dow Jones Newswires Tuesday. "Markets want to see a specific plan, backed by a war chest in excess of EUR1 trillion, with all parties united in their resolve to fix the crisis," said David Scutt, a senior currency trader at Arab Bank. But "recent history suggests it'll be a 'buy-the-rumour, sell-the-fact' event," he said. At 0540 GMT, the Australian dollar was at US$1.0469, up from US$1.0400 late Monday. Against the yen, the currency changed hands at Y79.68, up from Monday's Y79.297. Ahead of the outcome in Europe, Wednesday will see domestic markets focus on third-quarter inflation data due at 0030 GMT, which could open the flood gates to speculation about a November interest-rate cut. Economists surveyed by Dow Jones Newswires said they expect a 0.7% rise in the core consumer price index, a level that is likely to put the case for lower interest rates on the borderline. Alan Oster, chief economist at National Australia Bank, said a core CPI rise of 0.5% or less is needed to give the Reserve Bank of Australia the green light for a cut. Earlier Tuesday, Ric Battellino, the central bank's deputy governor, indicated there could be room to lower interest rates if the CPI confirms inflation pressures have eased. "Downward revisions to recent estimates of underlying inflation and the softer global economic outlook have made the outlook for inflation less concerning, providing scope for monetary policy to be supportive of economic activity, if needed," Battellino said at a business conference. "Tomorrow's CPI data will provide further information in this regard," he added. The RBA has held the cash rate target at 4.75% for almost a full year. Financial markets have priced in a cut for the near term, but economists are less convinced, saying the central bank can't afford to take its gaze off the mining boom, while there is potential for recovery in the economy in 2012. -By James Glynn, Dow Jones Newswires; 61-2-8272-4685; james.glynn@dowjones.com (Data provided by Reuters)

Source