Australian dollar extends gains ahead of RBA minutes

[Redator]

The Australian dollar has steadied on Monday after posting sparkling gains of 1.1% on Friday. In the North American session, AUD/USD is trading at 0.6503, up 0.18% on the day.

Powell sends US dollar sharply lower

The US dollar retreated against all the major currencies on Friday, including the Australian dollar. This followed Federal Reserve Chair Powell's dovish speech at a meeting of central bankers' in Jackson Hole.

Powell discussed the two key concerns for the Fed - inflation and employment. He noted that upside risk to inflation due to tariffs and expressed concern about the labor market, saying that "downside risks to employment are rising" and such risks could materialize quickly.

The markets seized on Powell's dovish comments about the employment picture, which bumped up expectations that the Fed will cut rates in September to around 85%. As well, a second cut before the end of the year is a strong possibility.

The inflation and employment reports in the first week of September could be significant factors in the Fed's rate path in the fourth quarter. It remains to be seen how many times the Fed will lower rates before year's end but what is clear is that the prolonged wait-and-see stance is about to end.

Will RBA minutes signal another rate cut?

The Reserve Bank of Australia lowered rates by a quarter-point to 3.60% at the August 12 meeting. Investing will be combing through the minutes of that meeting on Tuesday.

With inflation down to 2.1% in the second quarter, the decision to lower rates was a no-brainer. However, the Reserve Bank shocked the markets in July when it held rates rather than cutting, saying it needed to see additional inflation data.

The central bank still remains very concerned about inflation, even though it downgraded it growth forecast at the August meeting to 1.7% from 2.1%. If the minutes focus on the country's weak growth, this could be a sign of further rate cuts and the Australian dollar could reverse its recent gains.

AUD/USD Technical

• 0.6524 is a weak resistance line. Next, there is resistance at 0.6555
• There is support at 0.6469 and 0.6438

AUDUSD 1-Day Chart, August 25, 2025

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