AUD/USD struggles to recover above 0.6850 following drop on RBA minutes
- The RBA says it will consider further policy easing if needed to support growth.
- Industrial production in the US rose more than expected in August.
- US Dollar Index stays calm above 98.50 ahead of tomorrow's FOMC announcements.
The AUD/USD pair extended its slide on Tuesday during the Asian session and touched its lowest level in more than ten days at 0.6830 as the Reserve Bank of Australia's (RBA) cautious tone in the minutes of its September 3rd, 2019 monetary policy meeting weighed on the AUD. As of writing, the pair was trading at 0.6840, losing 0.35% on a daily basis.
The RBA leaves the door open for more rate cuts
Regarding the policy outlook, the RBA said that the board will consider further policy easing if with an aim to support growth and reach inflation targets. "It's reasonable to expect an extended period of low interest rates to achieve employment, inflation goals," the bank noted in its statement.
Commenting on the RBA's minutes, "we stick to our November call for the RBA to cut but if we get a poor jobs print on Thursday, then a move next month should be more a 50/50 proposition, not ~30% as it is currently," TD Securities analysts said.
"The fact that the RBA removed 'the accumulation of additional evidence' suggests the bar to cutting may have been lowered.”
On the other hand, today's data from the United States revealed that industrial production in August rose 0.6% to beat the market expectation for an increase of 0.2% but failed to provide a boost to the greenback ahead of the Federal Open Market Committee (FOMC) 2-day policy meeting that will start today. As of writing, the US Dollar Index was posting small daily losses at 98.57.
Technical levels to watch for
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
