AUD Steadies After Hawkish RBA Minutes, Supported by Soft USD

AUD/USD traded near 0.7155 on Tuesday, largely recovering most of the previous session's modest losses, as the pair found support from hawkish RBA meeting minutes, while a softer US dollar provided additional tailwinds.

**RBA Minutes Signal Hawkish Stance**

The latest RBA meeting minutes showed policymakers unanimously decided to hold the cash rate at 4.35%, but the committee's tone leaned hawkish, explicitly indicating that another rate hike remains possible. This stance reinforced market expectations of a tighter monetary policy outlook for the RBA, becoming a key factor underpinning the Aussie. Market estimates suggest a roughly 70% probability that the RBA will raise rates further to 4.60% before early next year, with the interest rate differential continuing to provide fundamental support for the AUD.

**Soft USD Offers External Support**

Meanwhile, the US dollar's overall softness provided additional support for AUD/USD. Recent US economic data has signaled weakening momentum, with cooling inflation, softening consumer confidence, and declining retail sales prompting markets to scale back expectations for further Fed rate hikes, weighing on the greenback. The divergence in monetary policy outlooks between the AUD and USD serves as the core logic behind the pair's current stabilization.

**Technical Focus on Key Support**

On the technical front, market attention centers on whether AUD/USD can hold above 0.7097, with 0.7000 serving as the nearest key support level below. The Aussie previously broke above 0.7090, marking a roughly 10-week high, and the overall rebound momentum remains intact. Australia's July employment report will be the next key local catalyst for AUD/USD, potentially offering further direction in the near term.