The Australian dollar closed lower today on the reduced prospect of future Reserve Bank of Australia (RBA) interest rises.
At 1700 AEDT, the Australian dollar was trading at $US0.9221/25, down from yesterday's close of 0.9259/63.
During the day, the local currency moved between a low of $US0.9166 and a high of 0.9230.
The minutes from the RBA's meeting on March 4 said previous rate hikes had seen a "substantial" tightening in financial conditions since the middle of 2007, but it had decided to lift the cash rate again to "restrain demand, in order to reduce inflation over time".
The board was also told the bank's internal forecast for underlying and headline inflation had been narrowed.
It was now expected to be "slightly below three per cent by mid-2010", compared to an earlier projection of above three per cent.
RBC Capital Markets senior economist Su-Lin Ong said the Australian dollar came under a little pressure when the RBA minutes were released but has since recovered.
"The minutes didn't suggest any urgency in further hikes," Ms Ong said.
"It did suggest a tightening up in terms of credit conditions domestically, although it remained consistent with a tightening bias."
The local currency dropped to $US0.9166 shortly after the minutes were released at 1130 AEDT but found support in the afternoon to rise above $US0.9200.
Ms Ong expected the US dollar to stay under pressure ahead of tonight's meeting of the US Federal Reserve's Open Market Committee (FOMC).
Economists are forecasting a 100-basis point cut to the federal funds rate, from 3 per cent to 2 per cent.
"The market has almost fully priced for a 100 point cut," she said.
"It will continue to weigh on the dollar and lend some support to the Aussie."
The FOMC's decision on US interest rates is due at 0515 Wednesday (AEDT).
Also due out overnight are February figures for US housing starts, building permits, and the producer price index.
The market has forecast US housing starts to fall 1.7 per cent in February, putting them below one million for the first time in 17 years.