Australian Dollar holds firm as markets eye RBA Minutes and inflation data

The Australian Dollar remains resilient against the US Dollar despite a modest rebound in the Greenback.
Focus shifts to Tuesday’s RBA Meeting Minutes following the central bank's decision to cut the cash rate by 25 basis points to 3.60% in the August meeting.
Australia’s July monthly CPI is due on Wednesday, with inflation expected to rise to 2.3% YoY from 1.9% in June.

Vishal Chaturvedi FXStreet

The Australian Dollar (AUD) is holding firm against the US Dollar (USD) on Monday, with AUD/USD hovering close to the 0.6500 mark. The pair remains resilient despite a modest rebound in the Greenback, which is stabilizing after a sharp drop on Friday. At the time of writing, the pair is trading around 0.6486.

Last week, the Aussie gained ground following Federal Reserve (Fed) Chair Jerome Powell’s dovish tone at the Jackson Hole Symposium, which triggered a broad US Dollar selloff and restored expectations for a possible September rate cut.

Focus turns to RBA Minutes and inflation data

The Reserve Bank of Australia (RBA) cut the cash rate by 25 basis points to 3.60% in its August 12 meeting, citing a softer economic outlook and easing price pressures. On Tuesday, markets will closely analyze the RBA Meeting Minutes to assess how united the board was on the decision and whether further cuts are likely in the near term.

Traders will watch for the RBA’s assessment of services inflation, household consumption trends, and external risks. Any dovish tone in the minutes could reinforce market bets for another cut as soon as October.

On Wednesday, attention shifts to the Monthly Consumer Price Index (CPI) report for July, which will offer a timely gauge of inflation momentum in Australia. While the quarterly CPI remains the RBA’s preferred measure, the monthly data is increasingly important in shaping near-term policy expectations. The inflation is projected at 2.3% on an annual basis, up from 1.9% in June, potentially signaling renewed price pressures. A stronger-than-expected print could reduce the urgency for further rate cuts and lend support to the Australian Dollar, while a softer reading would likely reinforce market expectations for additional RBA easing later this year.

While the Australian Dollar remains stable for now, broader sentiment stays cautious amid persistent concerns over China’s economic slowdown and global growth headwinds. The US Dollar, meanwhile, is showing signs of recovery as traders await key US data releases later in the week, including Consumer Confidence and Core Personal Consumption Expenditure (PCE) inflation and Weekly Initial Jobless Claims. Both softer inflation readings and signs of cooling in the labor market could reinforce expectations for a September Fed rate cut.

Economic Indicator

RBA Meeting Minutes

The minutes of the Reserve Bank of Australia meetings are published two weeks after the interest rate decision. The minutes give a full account of the policy discussion, including differences of view. They also record the votes of the individual members of the Committee. Generally speaking, if the RBA is hawkish about the inflationary outlook for the economy, then the markets see a higher possibility of a rate increase, and that is positive for the AUD.

Why it matters to traders?

The Reserve Bank of Australia (RBA) publishes the minutes of its monetary policy meeting two weeks after the interest rate decision is announced. It provides a detailed record of the discussions held between the RBA’s board members on monetary policy and economic conditions that influenced their decision on adjusting interest rates and/or bond buys, significantly impacting the AUD. The minutes also reveal considerations on international economic developments and the exchange rate value.

Author

Vishal Chaturvedi

FXStreet

I am a macro-focused research analyst with over four years of experience covering forex and commodities market. I enjoy breaking down complex economic trends and turning them into clear, actionable insights that help traders stay ahead of the curve.

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