AUD/USD loses ground below the mid-0.6500s, eyes on RBA Meeting Minutes, PBoC rate decision

The AUD/USD pair loses traction below the mid-0.6500s during the early Asian trading hours on Tuesday. The Reserve Bank of Australia (RBA) will publish the minutes of its February monetary policy meeting later in the day. The pair currently trades around 0.6532, down 0.12% on the day. 

The RBA governor Michele Bullock said all options are still on the table in terms of monetary policy decisions. However, the central bank needs to make sure that it doesn’t have to backtrack on inflation, and that inflation doesn't get away. Deutsche Bank analysts showed earlier this month that they expected the RBA to cut interest rates as early as May. Still, most analysts anticipate the Reserve Bank to ease policy between June and December.

On the USD’s front, the Federal Reserve (Fed) shifted to a more dovish stance in December, with markets now pricing in rate cuts by summer. Investors will take more cues from the FOMC minutes for the January meeting, with the focus on any discussion around the timing of rate cuts. The markets anticipate the first 25 basis points (bps) rate cut in 2024 as early as June, according to the CME FedWatch Tools. 

Market players will keep an eye on the RBA Meeting Minutes, followed by the People’s Bank of China (PBoC) interest rate decision on Tuesday. A poll of 27 market watchers conducted this week showed that 92.6% of respondents anticipated the five-year LPR to be cut on Tuesday. They expected a reduction of five to 15 basis points.