Australian Dollar Slides On RBA Minutes

The Australian dollar weakened against the other major currencies in the Asian session on Tuesday, as the Reserve Bank of Australia's minutes from its recent monetary policy meeting offered scope for further rate cut.

At the meeting on May 5, the RBA lowered its benchmark interest rate by 25 basis points to a record low of 2.00 percent. The minutes showed that the board members' choice to leave out guidance on monetary policy in the post meeting policy statement does not limit their scope for any action appropriate at future meetings.

The board members seemed to have deliberated the timing of an interest rate adjustment and were undecided between the current meeting and the next. With the revised staff forecast to be released a few days following the meeting, members felt that a rate cut at the current meeting was appropriate in light of addressing the challenges of communication.

The members also felt that further depreciation of the aussie is likely and essential for balanced growth, given the significant declines in commodity prices.

Traders now await the next RBA monetary policy meeting, due on June 2.

The Australia's benchmark S&P/ASX 200 index is currently down 0.54 percent or 30.40 points at 5,628. The broader All Ordinaries index is also down 0.49 percent or 28.00 points at 5,632.

Monday, the Australian dollar fell against its major currencies, after Reserve Bank of Australia Deputy Governor Philip Lowe said the central bank is likely to lower its interest rates again at the August meeting. The Australian dollar fell 0.54 percent against the U.S. dollar, 0.01 percent against the yen, 0.14 percent against the euro and 0.32 percent against the Canadian dollar on Monday.

In the Asian trading today, the Australian dollar fell to 6-day lows of 0.7956 against the U.S. dollar and 95.43 against the yen, from yesterday's closing quotes of 0.7986 and 95.84, respectively. If the aussie extends its downtrend, it is likely to find support around 0.76 against the greenback and 93.00 against the yen.

Pulling away from an early 6-day high of 1.0849 against the NZ dollar and a 4-day high of 1.4145 against the euro, the aussie dropped to 1.0796 and 1.4203, respectively. On the downside, 1.06 against the kiwi and 1.44 against the euro are seen as the next support levels for the aussie.

Against the Canadian dollar, the aussie edged down to 0.9681 from yesterday's closing value of 0.9711. The aussie may test support near the 0.94 region.

Looking ahead, U.K. consumer, producer and retail price indices for April, German ZEW economic sentiment index for May and Eurozone final CPI for April and trade balance for March are due to be released.

At 3:00 am ET, European Central Bank Governing Council member Christian Noyer is expected to speak at a Euromoney conference on inflation-linked bonds in Paris.

In the New York session, U.S. building permits and housing starts for April are set to be published.

Bretton Woods Committee 2015 Annual Meeting will be conducted in Washington D.C. at 8:30 am ET, in which World Bank Managing Director Sri Mulyani Indrawati, U.S. Treasury Secretary Jacob Lew and International Monetary Fund head Christine Lagarde are deliver speeches.

At 11:30 am ET, Bank of Canada Governor Stephen Poloz will address the Greater Charlottetown Area Chamber of Commerce in Prince Edward Island, followed by a news conference.

Half-an-hour later, Swiss National Bank director Jean-Pierre Danthine will deliver a speech titled "Swiss Monetary Policy Facts and Fictions", in Geneva.