The Australian dollar is lower against its US counterpart after the greenback strengthened following earlier losses and the Reserve Bank minutes failed to give clear direction.

At 0636 AEST on Wednesday, the local unit was trading at 76.95 US cents, down from 77.11 cents on Tuesday.

The US dollar recouped some of the losses it suffered following hawkish comments from New York Federal Reserve president William Dudley and Atlanta Fed chief Dennis Lockhart indicating the US central bank could raise its short-term interest rates at its September policy meeting.

Traders chose to gamble that the rate hike would come later in the year, pushing up the greenback.

The Aussie dollar was also weak on the mixed message from the local central bank.

On Tuesday, the Reserve Bank of Australia’s minutes showed that inflation is expected to remain low, which should help overall economic growth prospects. However, the RBA also mentioned that the elevated Aussie dollar would cause issues for transition from the mining boom.

“Although the overall message was mixed, the upbeat outlook of the economic prospects failed to stimulate conversation about a September cut,” Kathy Lien, managing director of FX strategy at BK Asset Management said.

AAP

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