Economists aren't expecting any change to interest rates on Tuesday but an increasing number believe the Reserve Bank of Australia will cut before the end of the year.
The RBA board will meet to decide whether or not to cut the cash rate – now at 2 per cent – for the third time in 2015.
Few economists expect governor Glenn Stevens to announce a cut to 1.5 per cent because the significantly lower Australian dollar has taken the pressure off but several believe there will be two rate cuts by the end of next year.
The market was pricing in a 27 per cent chance of a 25 basis point rate cut on Tuesday, Bloomberg reported.
"Currency depreciation may not work for every country, but the lower Australian dollar is already providing clear support for Australia's growth and inflation," HSBC chief economist Paul Bloxham said.
The Australian dollar has fallen 6 per cent in the last three months to $US70.4¢ on Sunday, providing looser financial conditions and supporting growth.
Economic indicators such as jobs growth and business confidence were steady and even climbed slightly over the last quarter, and despite the increasingly volatile global environment of diverging major economies China and the United States, Mr Bloxham said the RBA would remain "comfortably on hold".
Citi economist Josh Williamson doesn't contest the impact on growth provided by the lower dollar.
Citi is forecasting no rate change on Tuesday, but a cut to 1.5 per cent in November.
Citi analysts have been concerned about Australia's growth potential in a slowing world no longer so hungry for commodities.
In the last two months, Mr Williamson's global counterparts have downgraded their forecasts for both global growth and the growth for major trading partners such as China and South Korea.
"But the labour market is the key thing now," Mr Williamson said.
"The growth employment figures are not as good as they seem at first glance. We are creating more jobs but underemployment is high, and the new jobs are generally low income jobs and distributed in such a way it won't help solve growth issues or support an improvement in consumption."
Much of the jobs growth has been in industries that offer wages below the all industry average, while many of the high-paying jobs in professional services are in NSW.
Based on this assessment, Citi is forecasting that the RBA will cut rates in November to stimulate further growth.
"The real effect of exchange rates needs to be lower. Other trading partners are depreciating their exchange rates so the only way we'll see the change needed will be by cutting borrowing costs."
Mr Williamson added a cut in November would likely be followed by another in six months.
The other situation anticipated by Citi is an interest rate cut in February, soon followed by another. That would make interest rates as low as 1 per cent.
"If they wait until February, it will be too late and they'd need to cut again immediately after the first one. So we're hoping, and expect them to go in November."
