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AUD/USD drops below 0.93 after RBA Minutes

Australia’s dollar fell against all 16 major counterparts as the central bank signaled it was likely to maintain record-low interest rates.

The Aussie touched a two-week low after the Reserve Bank predicted protracted spare capacity in labor markets in minutes of its May meeting. The euro held near a three-month low versus the yen before European Central Bank officials speak at a conference in Frankfurt, amid speculation they will ease monetary policy next month. The Bank of Japan begins a two-day meeting today. The Thai baht fell the most in two months after the army imposed martial law.

“What was most notable out of the minutes was that there was a little bit more commentary around the labor market, highlighting that, while we have seen some better jobs numbers recently, there is a lot of spare capacity,” said Sean Callow, a senior currency strategist at Westpac Banking Corp. in Sydney. “That means that wages are likely to remain very soft and therefore markets should not try to bring forward expectations of higher rates. Maybe that change is weighing slightly on the Aussie dollar.”

Bloomberg [1]

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