Forex - Aussie weaker after RBA minutes show concern on level

Investing.com - The Australian dollar slumped on Tuesday after the central bank released minutes showing the board continued to see it as too strong given economic conditions in an overall FX market focused anew on Greece's debt woes.

AUD/USD traded at 0.7965, down 0.31, while USD/JPY changed hands at 119.96, down 0.03%. EUR/USD traded at 1.1294, down 0.18%.

The strong Australian dollar and federal spending plans are the key variables in assessing the case for a further rate cut from a record low 2%, the Reserve Bank of Australia said in the minutes of its May meeting that were released on Tuesday.

Since the May meeting, Australia released a federal budget that leaned more toward spending control than stimulus.

In Japan, March total wages were revised down to unchanged from a preliminary gain of 0.1%.

In New Zealand the central bank is slated to update expectations for inflation at 1500 local time (0300 GMT). The last survey showed 2-year expectations below the RBNZ's 2% target mid-point and it is possible this could dip further.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.14% to 94.36.

Overnight, the dollar pushed higher against a basket of other major currencies in subdued trade on Monday, as the greenback continued to recover from the previous week's sharp losses and investors turned their attention to the Federal Reserve's upcoming policy meeting.

The dollar rebounded as investors turned their attention to Friday’s U.S. inflation data and Wednesday’s minutes of the Fed's April meeting for fresh indications on the timing of an initial rate hike.

The greenback had weakened after data on Friday showed that U.S. industrial production fell for the fifth straight month in April and another report showed that U.S. consumer sentiment deteriorated to a seven month low this month.

The reports came after disappointing data on retail sales and producer inflation earlier in the week and dampened hopes for a second quarter rebound after a sharp slowdown in growth in the first three months of the year.

Markets are also braced amid fresh concerns over the prospects of a Greek default.

Athens is scrambling to reach a cash-for-reform deal with its international lenders in time to avoid a cash crunch.

Over the weekend, a leaked memo from the International Monetary Fund showed that there is "no possibility" that Athens can meet a loan repayment due on June 5 without a deal to unlock outstanding bailout funds.

Last week Greece came close to defaulting on a €750 million IMF repayment, which it ultimately made by tapping emergency reserves in its holding account at the IMF.