AUD/USD consolidates in a tight range below 0.6450 ahead of the RBA Meeting Minutes

The AUD/USD pair consolidates in a tight range below the mid-0.6400s during the early Asian session on Tuesday. Markets turn cautious ahead of the Reserve Bank of Australia (RBA) interest rate decision later in the day. The pair currently trades near 0.6437, gaining 0.01% on the day.

Michele Bullock began her seven-year term as RBA governor after taking over from Philip Lowe on Monday. She stated that she will inherit an economy with moderating inflation, robust employment, and continued development. The RBA Minutes are scheduled for Tuesday, and markets expect the Australian central bank to keep its cash rate at 4.10% for the third month in a row. However, the possibility of a rate hike in November cannot be ruled out, if inflation remains sticky. Furthermore, investors will take cues from the board's views on the downside economic risks as well as the spillover effects of China's economic downturn on Australia.

On the other hand, market participants await the US Federal Reserve's (Fed) policy announcement on Wednesday, while the central bank is widely expected to halt interest rates. According to the CME Fedwatch tools, the Fed is not expected to surprise the markets, with the probability of keeping rates unchanged at 99%. Nonetheless, the press conference by Fed Chairman Jerome Powell could offer hints about future interest rates path and this event will be closely watched by traders.

Looking ahead, the RBA Meeting Minutes will be the highlight on Tuesday and might trigger the volatility in the major pair. Later in the day, the US Housing Starts and Building Permits will be due. The attention will shift to the Fed policy meeting on Wednesday. Traders will take cues from the statement and find trading opportunities around the AUD/USD pair.