The Australian Dollar (AUD) weakened for the second straight day against the US Dollar (USD) on Tuesday following the release of the Reserve Bank of Australia (RBA) December monetary policy meeting minutes. Trading activity is expected to be subdued ahead of the Christmas break.

The RBA minutes indicated that the board had become more confident about inflation since the previous meeting, although risks remained. The board stressed the need for monetary policy to remain "moderately tight" until there was greater certainty about inflation.

The RBA board also noted that if future data were in line with or below forecasts, it would boost confidence in inflation and make it appropriate to begin easing policy restrictions. However, stronger-than-expected data could require keeping policy tight for a longer period.

Reserve Bank of Australia Governor Michele Bullock highlighted the continued strength of the labor market as a key reason why the RBA has been slower than other countries to begin its monetary easing cycle.

Source: FXSreet