The Australian dollar declined against its US counterpart on Tuesday following the release of the country’s central bank policy meeting minutes this morning.
The Aussie fell to as low as 94.66 US cents by 07:15 GMT, down 0.8 percent from the Asian session open of 95.42 cents.
The Reserve Bank of Australia signalled in its minutes of the June 4 policy meeting that the deprecation as trade terms decline, and the relatively tame inflation rate leaves scope for more interest rate cuts.
In the last meeting, the RBA lowered rates to a record low 2.75 percent in a bid to help weaken what was deemed to be a very strong currency which could affect trade and slow the economic recovery.
According to a statement, the RBA said the economic conditions outside the mining industry still looked weak, as the slowing mining sector also affected the rest of Australia’s economy.
The most rate-sensitive sectors of the economy, including consumer spending and construction, have been slow to respond to the rate cuts, while other industries like manufacturing and tourism have been struggling for years with a strong Australian dollar. Based on this, the RBA decided to lower rates this month and may do so again.