AUD/USD holds below 0.6800 as markets digest Powell’s Jackson Hole speech

• AUD/USD trades weaker near 0.6790 in Monday’s early Asian session. 
• Fed’s Powell said 'time has come' for interest rate cuts. 
• The RBA’s hawkish comments might cap the AUD's downside in the near term. 

The AUD/USD pair trades on a weaker note around 0.6790 during the early Asian session on Monday. However, the US Dollar (USD) is likely to remain under pressure after US Federal Reserve Chairman Jerome Powell’s dovish Jackson Hole speech. The US Durable Goods Orders for July are due later on Monday. 

Fed Chair Powell spoke at the Kansas City Fed's annual economic symposium in Jackson Hole on Friday, saying, "The time has come for policy to adjust.” Powell did not mention when rate cuts would start or how large they might be, but the markets expect the Fed to announce a quarter-point rate cut in the September meeting. The FOMC Minutes from the July meeting last week showed a “vast majority” of Fed officials believe a September cut will be appropriate so long as there are no data surprises. 

Following Powell’s speech, Philadelphia Fed President Patrick Harker said that the US central bank needs to lower rates methodically. Meanwhile, Chicago Fed President Austan Goolsbee said that monetary policy is currently at its most restrictive level, and the Fed’s focus is now shifting towards achieving its employment mandate. The expectation of the Fed rate cut is likely to exert some selling pressure on the USD and create a tailwind for AUD/USD. 

On the Aussie front, the Reserve Bank of Australia (RBA) Minutes revealed that the board members agreed that a rate cut is unlikely soon. RBA Governor Michele Bullock noted that the central bank will not hesitate to raise rates again to combat inflation if needed. The hawkish remarks from the RBA might further boost the AUD against the Greenback.