Australian Dollar Drops As RBA Minutes Indicate Further Easing

The Australian dollar fell against its major counterparts in the Asian session on Tuesday, after the minutes from the Reserve Bank of Australia's latest meeting showed that the board would ease monetary policy further, if required to support growth and inflation target.

The members assessed that an extended period of low interest rates would be required to make sustained progress towards employment and achieve the inflation target, according to the minutes from the September 3 meeting.

Members agreed that they would assess developments in both the international and domestic economies, including labour market conditions, and would ease monetary policy further if needed to attain growth and inflation target.

The board observed that the risks to the global growth outlook were tilted to the downside.

Rising trade conflict between the United States and China and slowing growth in China had weighed on trade and investment decisions in overseas economies, although businesses had continued hiring and labour market conditions had remained tight.

Data from the Australian Bureau of Statistics showed that Australia's house prices fell 0.7 percent on quarter in the second quarter of 2019.

That exceeded expectations for a decline of 1.1 percent following the 3.0 percent drop in the three months prior.

The aussie declined to 1.6117 against the euro, from a 5-day high of 1.6015 hit at 5:15 pm ET. The aussie is seen finding support around the 1.63 mark.

The aussie dropped to near a 2-week low of 0.6832 against the greenback, from Monday's closing value of 0.6865. If the aussie slides further, 0.67 is likely seen as its next support level.

The aussie fell to 1.0790 against the kiwi and 73.90 against the yen, from its early high of 1.0828 and a 4-day high of 74.29, respectively. The next possible support for the aussie is seen around 1.05 against the kiwi and 72.5 against the yen.

The Australian currency that closed Monday's trading at 0.9089 against the loonie depreciated to a 5-day low of 0.9053. The aussie is likely to challenge support around the 0.89 region, if it drops again.

Looking ahead, German ZEW economic sentiment index for September is due in the European session.

In the New York session, Canada manufacturing sales for July, U.S. industrial production for August and NAHB housing market index for September are scheduled for release.