Australian Dollar Trades Lower After RBA Minutes

The Australian dollar traded lower against its major counterparts in the Asian session on Tuesday, as minutes from the Reserve Bank of Australia's recent meeting showed that weak wage growth is unlikely to revive either inflation or consumption, opening the door for an interest rate cut in February.

Minutes from the bank's December 3 meeting showed that "the current rate of wages growth was not consistent with inflation being sustainably within the target range."

The board also noted that slow wage growth was restricting "consumption growth returning to trend."

Members agreed that an extended period of low interest rates would be required in Australia to reach full employment and achieve the inflation target, it showed.

"The board would continue to monitor developments, including in the labour market, and was prepared to ease monetary policy further if needed to support sustainable growth in the economy, full employment and the achievement of the inflation target over time," it added.

The aussie dropped to 0.9035 against the loonie and 75.14 against the yen, from its early highs of 0.9059 and 75.43, respectively. The next possible support for the aussie is seen around 0.88 against the loonie and 72.00 against the yen.

Reversing from its previous highs of 1.6182 against the euro, 0.6885 against the greenback and 1.0436 against the kiwi, the aussie declined to 6-day lows of 1.6238, 0.6861 and 1.0402, respectively. If the aussie slides further, it may find support around 1.65 against the euro, 0.67 against the greenback and 1.025 against the kiwi.

Looking ahead, Eurozone trade data for October, U.K. jobless rate for the three months ended October and claimant count rate for November are due out in the European session.

In the New York session, Canada manufacturing sales for October, U.S. housing starts, building permits and industrial production, all for November, are set for release.

At 12:30 pm ET, Federal Reserve Bank of Boston President Eric Rosengren will give a speech at the Forecasters Club of New York.