The dollar slipped slightly in Asian trading on Tuesday, while the Australian dollar soared after RBA minutes lessened expectations of an interest rate cut.
The Aussie had already strengthened after yesterday’s rebound in crude oil futures. Minutes of the Reserve Bank of Australia's May policy meeting showed weak price growth and the quarter point rate cut to a record low of 1.75 percent by the policymakers didn’t satisfy investors.
The RBA pointed to the recent dip into deflationary territory and signaled that there would be further interest rate cuts this year.
The Aussie was up 0.8 percent at $0.7349 after rising as high as $0.7368, a decisive increase from the two-and-a-half month low of $0.7236 suffered in the previous session.
U.S. Dollar Drops Faintly
U.S. crude hit a six-month high, as the market focused on supply disruptions that prompted Goldman Sachs to issue a more bullish judgment.
The dollar index, which tracks the U.S. currency against a basket of six rivals, edged down 0.1 percent to 94.450 slightly off from a three-week high of 94.845 hit on Friday.
The yen was relatively steady ahead of this weekend's G7 finance leaders' meeting in Sendai, northern Japan on May 20-21. The dollar was down 0.1 percent at 108.92 yen while the euro shed 0.1 percent to 123.25 yen. The euro was nearly flat against the dollar at $1.1317.
The British pound added 0.7 percent to $1.4488 after dropping to a three-week low of $1.4333 in the previous session ahead of Britain's June 23 referendum on European Union membership.
According to Kathy Lien, managing director at BK Asset Management, "Until some piece of data significantly alters the market's expectations for Fed policy, we expect the dollar to remain confined to its recent range against the euro and Japanese yen."