The Australian dollar backed off today as the minutes of the central bank’s policy meeting indicated that the RBA is ready to implement additional monetary easing. The currency remained weak even as stocks and commodities rallied.

The Reserve Bank of Australia cut its main interest rate by 25 basis points to 3 percent during its last policy meeting on December 4. The minutes of that meeting indicated:

At this meeting, the information on labour costs and softening labour market conditions suggested that the inflation outlook still afforded the Board some scope to provide additional support to demand. Further confirmation that the peak in resource sector investment was near, and that the short-term outlook for non-resource investment remained subdued, indicated that there was a case for the Board to provide that support.

The Standard & Poor’s GSCI Index of 24 commodities rose 0.5 percent, while the S&P 500 Index climbed as much as 1.2 percent yesterday. Yet the Aussie did not avoid losses even in such positive trading environment.

AUD/USD dropped from 1.0532 to 1.0513 and AUD/JPY went down from 88.67 to 88.55 as of 3:06 GMT today. EUR/AUD advanced from 1.2554 to 1.2598.

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