Australian dollar suffers as meeting minutes released

Chris Lee

The Australian dollar was a key loser in the foreign exchange trading markets on Tuesday after the minutes of the most recent central bank meeting were made public.

It was revealed that the Reserve Bank of Australia debated whether or not interest rates should be cut in November.

According to the record of the meeting, it was “agreed” that there were some arguments in favour of bringing down the cash rate, which is currently sitting at 0.75%.

It was agreed by central bankers that wage growth problems could potentially justify the decision – as could inflation.

In the end, the Bank decided against it on the grounds that it could impact confidence.

However, the Australian dollar suffered in any case.

It was down by a quarter of a percentage point in its pair against the US dollar and was seen at $0.6789 at one stage.

In its pair against the Japanese yen, it was seen down by almost 0.4% at 73.73 yen.

Elsewhere, traders appeared to show signs of fatigue at the ongoing inability of China and the US to strike a trade deal and put an end to their long-running trade battle.

The American news outlet CNBC claimed on Monday that the Chinese government is not hopeful of a trade deal.

The government is believed to be worried in particular by statements made by President Donald Trump recently in which he claimed that the end of tariffs had not been agreed.

The US dollar was down over the course of the day.

The dollar index, which measures the performance of the greenback compared to several other global currencies, was seen at 97.856 – which represented one of its worst performances for a fortnight.

It is also down on a fortnightly basis against the single European currency.

In this pair, it was seen at $1.1067.

However, this was also down in part to a tweet posted by Trump in relation to his meeting with Jerome Powell, the chair of the US Federal Reserve.

Despite the fact that Trump has focused on what he perceives to be the Federal Reserve’s lack of movement on cutting interest rates, the meeting was described by Trump as “cordial”.

Trump claimed that lots of different topics were mentioned, including everything from “low inflation” to “interest rates”.

However, this was later denied to some extent by the Federal Reserve, with a statement saying that Powell’s opinion on the way interest rates should be set in the coming months were not mentioned.

The offshore Chinese yuan, which is the version of the Chinese currency that is opened up to international forex trading, also appeared to be suffering as a result of the trade war twists and turns.

It was seen at 7.0295 against the US dollar, which was its most negative performance in a number of weeks.

Markets and analysts are now beginning to worry that a trade deal might not be reached – and that this could impact various currency pairs.

The pair containing the US dollar and the safe haven Japanese yen is expected to be particularly sensitive.

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