- AUD/USD extended losses to hit a session low of 0.6868 after the RBA minutes.
- Policymakers called rate cuts net positive for the economy and kept the doors open for more stimulus.
AUD/USD continues to trade in the red after the Reserve Bank of Australia's (RBA) December meeting minutes showed the board agreed to reassess economic conditions at the February meeting.
The board said the current wage growth is not fast enough to reach inflation, consumption goals and took note of the gloomy mood among consumers.
The policymakers judged that stimulus from rate cuts outweighed any negative impact on confidence and stood ready to deliver further stimulus if required.
The central bank kept rates steady at 0.75% in December, having delivered three 25 basis point rate cuts earlier this year. Markets fear the RBA would hit the zero lower bound in 2020 and may have to do unconventional policies like quantitate easing (government bond purchases).
The AUD/USD pair, which was already trading in the red at 0.6876, extended losses to hit a session low of 0.6868 after the RBA minutes. After all, the minutes were slightly dovish with the officials calling rate cuts as net positive for the economy and leaving the doors open for more stimulus.
As a result, AUD/USD could continue to bleed during the day ahead. The bearish pressures around the AUD will likely strengthen if the equities turn risk-averse. The futures on the S&P 500 are currently reporting a 0.14% loss.
It's worth noting that the pair failed to eke out gains on Monday despite the upbeat China data and Sino-US trade optimism – a sign of bull exhaustion.
Technical levels
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