The Australian dollar may weaken in today's trading if the Reserve Bank of Australia keeps interest rates unchanged once more as the economic growth momentum also gradually improves.

This week's trading of the Australian dollar is now under immense pressure of a pullback today based on the broad assumption that a volatile trading will commence ahead of the RBA's meeting this afternoon.

The Melbourne Cup Day set for today will also see crucial decisions to be made by monetary policy officials that will impact on the prevailing economic conditions in the whole of Australia.

RBA chief Glenn Stevens on Monday hinted that the slower inflation last month, very low business loan applications amidst increasing employment figures would all be considered "essential elements" in the decision-making process of the RBA.

Interest rates stays

Fifteen of the 20 economists polled by the International Business Times-Sydney expect the RBA maintain the so-called overnight cash rate target at 4.5 percent, while 5 believed a 25 basis-point increase is possible.

National Australia Bank's economist Benjamin Westmore told the International Business Times-Sydney: "We expect the RBA to leave rates unchanged at the meeting. However, signs of stronger economic activity in the retail trade and labour market data over the next month could well be the catalyst for a December rate rise."

Australia is undergoing a mining boom that International Monetary Fund staff last week said is starting to exhibit "early signs" of inflation pressures.

A foreign exchange analyst with BNP Paribas noted the Australian dollar is in danger of a pullback this week but could easily bounce late in the week into the next.

In the interest-rate futures market ahead of Tuesday's decision, the 3-year bond lost three ticks to 95.06, while the 10-year bonds traded off three ticks at 94.74.