AUD/USD trades with mild positive bias near 0.6700, RBA Meeting Minutes eyed

• AUD/USD posts modest gains around 0.6695 on Monday. 
• The markets remain unconvinced that the Fed will pivot earlier than previously expected. 
• Australia’s Unemployment Rate rose more than expected last month, easing the possibility of another RBA rate hike.

The AUD/USD pair trades with a mild positive bias near 0.6695 during the early Asian session on Monday. The weaker US Dollar (USD) provides some support to the pair. The Fed’s Bostic, Barr, Waller, Jefferson, and Mester are set to speak on Monday. The Reserve Bank of Australia (RBA) will publish the minutes of its monetary policy meeting on Tuesday. 

Fed officials remain very cautious about cutting interest rates prematurely. Richmond Fed President Thomas Barkin noted that inflation is easing but highlighted that it will "take more time" to reach the Fed’s 2% target. Cleveland Fed President Loretta Mester said that the Fed's current monetary policy stance is appropriate as it continues to assess incoming economic data. Additionally, Fed Governor Michelle Bowman said the policy is restrictive but is willing to hike rates if inflation stalls or reverses.

The FOMC minutes will be due on Wednesday. In the latest meeting, the Fed held rates steady and the tone of the policy statement was little changed. The US central bank emphasized a lack of further progress toward its inflation objective. Investors have priced in 10% odds of a cut in June and nearly 80% chance in September. The higher-for-longer US rate narrative might boost the Greenback in the near term and cap the upside of the AUD/USD pair.

On the Aussie front, Australia’s jobless rate climbed more than expected last month, easing the chance of another RBA rate hike. The recent jobs report showed the economy added 38.5K jobs in April, while the Unemployment Rate rose to 4.1%. According to the RBA’s forecasts for employment and inflation, the Australian central bank expected the jobless rate would be 4% by June, 4.2% by year end, and 4.3% in June 2025.