AUD/USD remains firm following dovish/neutral FOMC minutes

• AUD/USD has been little changed on the FOMC minutes.
• The Aussie is expected to remain in a state of flux.

AUD/USD has been little changed following the Federal Open Market Committee's minutes that have been released at the turn of this hour. Indeed, they were a dovish set of FOMC minutes with the majority viewing the rate cut as a mid-cycle adjustment. However, a couple of members were calling for a 50 basis point cut to address low inflation, and it seems that the Fed is joining the series of counterparts in contemplating more than just quantitative easing should there be signs of a pending recession.

FOMC minutes highlights:

• Participants said forward guidance and QE might not be enough to eliminate protracted risks at lower bound.*
• Several said uncertainties remained about the efficacy of QE.*
• A number of Fed officials stressed need for Fed flexibility.
• A couple policymakers would have preferred a 50 bp cut to address low inflation.
• Several favoured maintaining rates unchanged.
• Those who favoured cut pointed to decelerating economy, elevated risks on global economy and inflation.
• A few policymakers expressed concern of 3m/10y yield curve inversion.

Meanwhile, the Aussie is expected to remain in a flux as the improving domestic narrative is offset by weaker risk appetite, although a quiet spell might be expected into the close this week should the Jackson Hole fail to communicate anything more than what has already been priced in, potentially allowing for for a drift back to the downside. 

As for commodity markets, these are also mixed while investors waited for more signs on that state of the economic outlook. "The ANZ China Commodity Index ended yesterday down 0.2% while industrial metals suffered the most, with copper leading the sector lower - Precious metals remain strong.

AUD/USD levels

As for the technical backdrop, AUD/USD is holding sideways near term:
 
"It has not overcome any resistance of note and continues to hold above the 0.6738 January 2019 low. This support is reinforced by 0.6720, the 2016-2019 support line (connects the lows)," analysts at Commerzbank noted - "This move however looks exhaustive and we would allow for some consolidation/correction near term."