AUD/USD Slides to 0.6460 as RBA Minutes Reveal Dovish Shift

AUD/USD Drops Back to 0.6460 as RBA Minutes Show Caution, Trade Worries Mount

Australian Dollar Surrenders Monday Gains

The Australian Dollar (AUD) fell against the US Dollar (USD) on Tuesday, pulling back to 0.6460 as markets digested the Reserve Bank of Australia's (RBA) May meeting minutes. The pair erased Monday’s 1% gain, pressured by dovish central bank sentiment and weak current account data.

RBA Opts for Predictability Amid Global Trade Uncertainty

According to the RBA minutes, the board considered a 50 bps rate cut but ultimately trimmed the cash rate by just 25 bps, from 4.10% to 3.85%. The decision was driven by a desire for policy predictability amid heightened risks tied to US trade policy and its global impact.

“The uncertainty and novel aspects of the situation make it challenging to be precise on the size of the impact,” said RBA Assistant Governor Sarah Hunter during a speech in Brisbane.

Global Trade Woes and Key Data Ahead

Hunter also flagged the potential negative effects of escalating international trade tensions on investment, production, and employment, reinforcing the RBA’s data-dependent stance going forward.

Meanwhile, the US Dollar Index (DXY) has found some footing near 98.95, a six-week low, providing some resistance to AUD/USD's upside recovery.

What to Watch Next

• Tuesday: US JOLTS Job Openings
• Wednesday: Australian Q1 GDP
• Friday: US Non-Farm Payrolls (NFP)

These events could shift sentiment and determine whether AUD/USD can finally break above the stubborn 0.6500 resistance.

Related Reads on Tredu:

• RBA Meeting Analysis: Why the Board Chose Caution
• AUD/USD Forecast: What 0.6500 Means for Traders
• Global Trade Tensions: A Growing Threat to Currencies