The Australian dollar fell against the greenback after Reserve Bank's minutes suggested another interest rate cut was on the horizon.
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When the minutes from the April 7 meeting were released, at 11.30am AEST on Tuesday, the Aussie was buying US77.10¢.
Less than 15 minutes later it was as low as US76.86¢, extending overnight losses it accrued after RBA chief Glenn Stevens in a New York speech flagged further rate cuts and said the currency was "very likely to fall further." Late Tuesday afternoon it had risen to US76.95¢.
In early Monday afternoon trade, the dollar had been buying US78.2¢.
In the minutes, the RBA explained its decision to hold rates steady earlier this month, confounding many economists who had expected the central bank to ease.
"… the board judged that it was appropriate to hold interest rates steady for the time being, while accepting that further easing of policy may be appropriate over the period ahead to foster sustainable growth in demand and inflation consistent with the target," the minutes read.
Half a cent drop
The Aussie had already dropped half a US cent over night when RBA governor Glenn Stevens signalled a further easing of monetary policy was not far away.
It dipped just before midnight Monday, from US77.66¢ to 77.16¢ about 20 minutes later.
Mr Stevens was speaking at the The American Australian Association in New York, hosted by Goldman Sachs, when he spoke broadly about the global economy and more specifically about the challenges Australia faces.
"Relevant considerations of late include the fact that output is below conventional estimates of potential, aggregate demand still seems on the soft side as resources investment falls sharply, and unemployment is elevated and above most estimates of natural rates or NAIRUs," he said.
"And, inflation is forecast to be consistent with the 2 to 3 per cent target."
"So, interest rates should be quite accommodative and the question of whether they should be reduced further has to be on the table."
Great impact on the dollar
Citi's head of foreign exchange sales in Australia Mark Woodruff said Mr Steven's speech had a greater impact on the dollar than the minutes, which simply reiterated that the board was on an easing bias.
The minutes showed the RBA had wanted to see official inflation figures, due to be released on Wednesday, before moving the cash rate.
Mr Woodruff said he expected the Aussie to continue to trade lower over time, as commodity prices remained under pressure.
TD Securities released its analysis of the minutes, in which they suggested the debate between board members would have been lively, with a focus on whether to "cut now or go later".
It said the minutes showed simply, why the board did not cut in April, that the meeting was live and that an easing bias remained.
The RBA's minutes show the board noted commodity prices had further dropped over the preceding month, and while much of the decline over 2014 was driven by growth in global supply, more recently the slowing in growth of Chinese demand had also had an impact.
Mining investment had declined, the board said, but overall conditions in the housing market had remained strong.
"Members remained alert to the possibility that the low levels of interest rates could foster imbalances in the housing market," the minutes read.
"Members noted that the Bank was working with other regulators to assess and contain risks arising from the housing market."
