Forex - Aussie weakens after minutes show scope for further rate cut

Investing.com - The Aussie fell on Tuesday after the central bank released minutes of its latest policy decision that showed scope for a further cash rate cut.

A cash rate cut to a record low 2.25% in February needs to work its way through the economy, but a further cut may be appropriate, the Reserve Bank of Australia said in minutes from its March meeting.

Elsewhere, the yen was slightly weaker ahead of the latest review of monetary policy by the Bank of Japan.

AUD/USD traded at 0.7619, down 0.29%, after the minutes, while USD/JPY changed hands at 121.46, up 0.10%. EUR/USD eased to 1.057, down 0.10%.

The Bank of Japan issues its monetary policy decision at 0330 GMT, expected to keep policy stable.

Overnight, the dollar remained lower against a basket of other major currencies on Monday, as investors continued to lock in profits from the greenback's recent rally to 11-1/2 year highs and after disappointing U.S. data dampened optimism over the strength of the economy.

Official data earlier showed that U.S. industrial production rose just 0.1% in February, falling short of expectations for a 0.2% gain.

Manufacturing output dipped 0.1% as automobile production fell, indicating that economic growth could slow in the first quarter.

Another report showed that manufacturing activity growth in New York State slowed in March for a second straight month as new orders fell.

Market participants were now eyeing Wednesday’s Federal Reserve statement to see if it would drop its reference to being patient before raising rates and signal that it is ready to hike rates depending on economic data.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was flat at 100.14.

EUR/USD climbed 0.76% to 1.0575, pulling away from The euro found support after Italy's central bank governor expressed concerns over that the pace of its fall since the European Central Bank launched its trillion-euro quantitative easing program early last week.

He added that there were risks the program could overshoot its goal, as well as fuel an excessive rise in asset prices.