Aussie drops as RBA reiterates need for weaker currency
The RBA minutes for June policy meeting stressed on the importance of having deeper declines in the currency to boost key sectors in the economy.
“It would need to be lower for a sustained period to have a significant effect on large investment decisions in other trade-exposed sectors,” RBA minutes said. Weaker currency is “both likely and necessary.”
The bank is ready for further monetary easing if needed, said RBA Governor Glenn Stevens.
The RBA is trying to put the maximum downside pressure on the Aussie to keep it weak, especially against the U.S. dollar.
The Aussie advanced against the dollar last week after some reports expressing the concerns of the U.S. administration regarding the strong dollar.
However, the Aussie may retreat this week if the Federal Reserve gave some hawkish comments about monetary policy and the economic conditions.
The AUDUSD traded lower at 0.7730 after hitting a bottom of 0.7726, while the session’s high was recorded at 0.7778.
The RSI 14 momentum indicator fell below the 50-center line, where the price is facing support at 0.7736, which represents Daily SMA 20 level.