• The Australian Dollar holds ground as the RBA is highly expected to adopt a hawkish stance regarding its policy outlook.
• The Aussie Dollar may advance further as RBA minutes indicated that a rate cut is unlikely soon.
• The US Dollar received downward pressure as the Fed Chair Powell signaled a rate cut soon.

The Australian Dollar (AUD) moves sideways against the US Dollar (USD) on Tuesday, holding a position just below the seven-month high of 0.6798 recorded on Monday. However, the downside of the AUD/USD pair would be limited as traders expect different policy outlooks between the two central banks.

The recent Reserve Bank of Australia (RBA) Minutes showed that the board members agreed that a rate cut is unlikely soon. Additionally, RBA Governor Michele Bullock expressed that the Australian central bank will not hesitate to raise rates again to combat inflation if needed.

The US Federal Reserve (Fed) Chairman Jerome Powell stated at the Jackson Hole Symposium on Friday, "The time has come for policy to adjust." However, Powell did not specify when rate cuts would begin or their potential size.

According to the CME FedWatch Tool, markets are fully anticipating at least a 25 basis point (bps) rate cut by the Federal Reserve at its September meeting.