Forex - AUD/USD dollar weakens after RBA minutes show easing scope

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Investing.com - The Australia dollar remained a tad weaker in Asian trade on Tuesday after the central bank released minutes from its November monetary policy review that suggested another rate cut below a record low 2.5% remains a possibility.

AUD/USD traded at 0.9373, down 0.03%, in a range of 0.9354 - 0.9386 after the Reserve Bank of Australia said it would not close the possibility to support sustainable economic growth even as evidence of the impact the cash rate cuts in an easing cycle two years old becomes evident, according to the minutes of the Nov. 5 board meeting released on Tuesday.

The minutes suggested that the exchange rate however remains "uncomfortably high" and has hindered a shift from resources-led investment to housing and other sectors.

The RBA said it judged it was prudent to leave the cash rate unchanged, but "not to close off the possibility of reducing it further should that be appropriate to support sustainable growth in economic activity, consistent with the inflation target."

USD/JPY traded at 99.67, down 0.32%, in a range of 99.57 - 100.01 as the Nikkei fell in morning trade, down 0.73%, following a weak of solid gains linked to a weaker yen helping exporters. But comments overnight indicating the Federal Reserve will leave its ultra-loose monetary policies in place into early 2014 gave the yen room to retrace recent weakness.

"While growth in 2013 has been disappointing, I believe a good case can be made that the pace of growth will pick up some in 2014 and then somewhat more in 2015," Bank of New York President William C. Dudley said on Thursday.

Still, Dudley gave no real indication as to when bond purchases may taper, which kept the greenback in negative territory.

Elsewhere, National Association of Home Builders/Wells Fargo Housing Market Index came in unchanged in November at 54, missing analysts' calls for an uptick to 55 this month.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, traded at 80.72, down 0.09%.

On Tuesday, the U.S. is to release data on the employment cost index, an important inflation indicator.

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This article appears in: Investing , Forex and Currencies

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