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Australian Dollar Slides against US Dollar on Mixed RBA Outlook


The Australian Dollar has made a minor decline against the US Dollar today, following the release of the Reserve Bank of Australia’s (RBA) June minutes.

RBA Outlook: Cautious Minutes Leave Australian Dollar Unsettled

The latest AUD USD dip has been triggered by June’s RBA minutes, which have failed to provide a definitively positive outlook.

According to the minutes, policymakers predicted a slowdown in economic growth over Q1, due to low retail sales in March. Additionally, the national housing market was also flagged up as a potential drag on the economy.

Despite this caution, the RBA still forecast gradual growth in the future.

US Dollar Appreciates as Fed Official Warns of Low Interest Rate Risk

The US Dollar’s advance against the Australian Dollar has come after a recent Federal Reserve speech, from official Eric Rosengren.

Rosengren has warned that continually low interest rates may risk financial stability. This has raised hopes that a third US interest rate hike could come in 2017, despite earlier concerns that two would be the limit.

Australian Dollar to US Dollar Forecast: Westpac Index due alongside Fed Speech

Looking ahead, the next Australian news to watch out for will be Wednesday’s Westpac leading index.

This average figure measures the economic wellbeing of the Australian economy, and previously fell by -0.1% in May.

If the index rises to a positive range in June then the Australian Dollar may rise in value, although the data is classed as ‘low impact’ regardless.

As with earlier US Dollar movers, the USD will next be influenced by another Federal Reserve speech.

The upcoming remarks will be delivered by Robert Kaplan, a member of the Fed’s Open Market Committee. As a voter on interest rate decisions, Kaplan’s words hold a special weight.

If he is particularly optimistic about the chances of a third rate hike in 2017, then the US Dollar may rise.

Further on, Wednesday’s main US news will be existing home sales sales data for May. These are forecast to show a marginal dip in sales compared to April.

This result could mean that the US housing market is cooling slightly, though a difference of 5.57m homes sold and 5.55m may not be enough to move the US Dollar.

Recent Interbank AUD USD Exchange Rates

At the time of writing, the Australian Dollar to US Dollar (AUD USD) exchange rate was trading at 0.7587 and the US Dollar to Australian Dollar (USD AUD) exchange rate was trading at 1.3177.