AUD/USD slips to fresh 5.5-month low after RBA minutes

The AUD is being offered across the board on dovish RBA minutes.
The Aussie house price index falls more than expected.
AUD/USD slips to lowest since January 3.

Omkar Godbole FXStreet Contributor

The AUD/USD fell to fresh 5.5-month lows after the minutes of the Reserve Bank of Australia's June rate decision showed consensus among policymakers that further monetary easing would be appropriate.

The currency pair is currently trading at 0.6841, the lowest level since January 6. Notably, the Aussie dollar is down for the first straight session and has dropped on five out of the last six trading days.

“Given the amount of spare capacity in the labor market and the economy more broadly, members agreed that it was more likely than not that a further easing in monetary policy would be appropriate in the period ahead,” the minutes said, while adding further that factors limiting inflation, particularly wage growth, are expected to last for some time.

With the minutes sounding dovish, markets may begin pricing the possibility of RBA cutting rates in July. As of writing, the market is priced in for a rate cut in August and another one in December.

As a result, the AUD/USD pair will likely remain on the defensive during the day ahead - more so, as the Aussie house price index fell 3% quarter-on-quarter in the first quarter compared to -2.6% expected, according to the official data released at 01:30 GMT.

It is worth noting that the central bank cut rates by 25 basis points to a new record low of 1.25% earlier this month.

Technical Levels

1. R3 0.6912
2. R2 0.6899
3. R1 0.6875
PP 0.6862
1. S1 0.6838
2. S2 0.6825
3. S3 0.6801

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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