Investing.com - The Australian dollar traded lower against its U.S. rival during Thursday’s Asian session as traders in the region digested the release of minutes from the Federal Reserve’s July monetary policy meeting showed support among Fed members for tapering the central bank’s easing efforts at some point this year.
In Asian trading Thursday, AUD/USD fell 0.18% to 0.8955. The pair was likely to find support at 0.8920, the low of August 7 and resistance at 0.9233, the high of August 19.
Traders are also taking a cautious tone to the Aussie and other riskier currencies ahead of the flash reading of the Chinese purchasing managers index due out later Thursday.
"A few members emphasized the importance of being patient and evaluating additional information on the economy before deciding on any changes to the pace of asset purchases," according to the Fed minutes.
That can be interpreted as some Fed members wanting to take a wait-and-see approach to tapering. However, "Almost all participants confirmed that they were broadly comfortable" with the committee reducing "the pace of its securities purchases later this year," the minutes indicated.
The Aussie has been viewed by market participants as among the most vulnerable currencies to Fed tapering. Australia’s own central bank is providing little support for the currency.
Although the Reserve Bank of Australia has cut interest rates eight times since late 2011, it still views the Aussie as overvalued and its recent language suggests the door is open to further rate cuts.
"Regarding the communication of this decision, members agreed that the bank should neither close off the possibility of reducing rates further, nor signal an imminent intention to reduce rates further," RBA said in minutes released earlier this week.
Elsewhere, AUD/JPY fell 0.09% to 87.65 while AUD/NZD dropped 0.13% 1.1427.
In Asian trading Thursday, AUD/USD fell 0.18% to 0.8955. The pair was likely to find support at 0.8920, the low of August 7 and resistance at 0.9233, the high of August 19.
Traders are also taking a cautious tone to the Aussie and other riskier currencies ahead of the flash reading of the Chinese purchasing managers index due out later Thursday.
"A few members emphasized the importance of being patient and evaluating additional information on the economy before deciding on any changes to the pace of asset purchases," according to the Fed minutes.
That can be interpreted as some Fed members wanting to take a wait-and-see approach to tapering. However, "Almost all participants confirmed that they were broadly comfortable" with the committee reducing "the pace of its securities purchases later this year," the minutes indicated.
The Aussie has been viewed by market participants as among the most vulnerable currencies to Fed tapering. Australia’s own central bank is providing little support for the currency.
Although the Reserve Bank of Australia has cut interest rates eight times since late 2011, it still views the Aussie as overvalued and its recent language suggests the door is open to further rate cuts.
"Regarding the communication of this decision, members agreed that the bank should neither close off the possibility of reducing rates further, nor signal an imminent intention to reduce rates further," RBA said in minutes released earlier this week.
Elsewhere, AUD/JPY fell 0.09% to 87.65 while AUD/NZD dropped 0.13% 1.1427.