Australian Dollar Extends Fall Amid Rate Cut Prospects

The Australian dollar continued to be weaker against the other major currencies in the Asian session on Tuesday, as minutes from the Reserve Bank of Australia's April meeting showed that the bank was considering further rate cut and it wanted to assess upcoming data before making the decision. The RBA governor Glenn Stevens' comments signalling further rate cut also weighed on the currency.

Members of the Reserve Bank of Australia's monetary policy board said that the monetary policy currently in place continues to be appropriate, the minutes from the Reserve Bank of Australia's April 7 meeting showed.

The members added that the Australian economy continues to grow slightly below trend, although the lower Australian dollar will give the economy a boost.

Overnight, the RBA Governor Glenn Stevens hinted that another rate cut is possible at its May 5th policy meeting.

Speaking at the American Australian Association in New York on Monday, the RBA Governor Glenn Stevens said the interest rates should be quite accommodative and the question of whether they should be reduced further "has to be on the table."

"The board has, moreover, clearly signaled a willingness to lower it even further, should that be helpful in securing sustainable economic growth," Stevens said.

Monday, the Australian dollar traded lower against its major rivals. The Australian dollar fell 0.61 percent against the U.S. dollar, 0.50 percent against the Yen, 0.25 percent against the Euro, 0.79 percent against the Canadian dollar and 0.31 percent against the NZ dollar.

In the Asian trading today, the Australia dollar fell to a 2-week low of 1.0059 against the NZ dollar and a 6-day low of 1.3961 against the euro, from yesterday's closing quotes of 1.0077 and 1.3899, respectively. If the aussie extends its downtrend, it is likely to find support around 0.99 against the kiwi and 1.45 against the euro.

Against the U.S. dollar and the yen, the aussie dropped to 5-day lows of 0.7683 and 91.78 from yesterday's closing quotes of 0.7723 and 92.02, respectively. On the downside, 0.75 against the greenback and 89.00 against the yen are seen as the next support levels for the aussie.

The aussie edged down to 0.9417 against the Canadian dollar, from yesterday's closing value of 0.9441. The aussie may test support near the 0.93 region.

Looking ahead, the German ZEW economic sentiment index for April is slated for release in the European session.

In the New York session, Canada wholesale sales data for February is set to be published.

At 12:30 pm ET, European Central Bank Supervisory Board Chair Daniele Nouy is expected to speak at the International Center for Monetary and Banking Studies in Geneva.