Reserve Bank of Australia board meeting minutes likely to show that the board is encouraged by stronger activity signs and more signals that the housing market is being cooled by the recent round of macro-prudential measures.

There is increased tension between improving local data and fresh large falls in commodities prices are more interesting developments since the board has met.

"The improvement in the local economy will keep the RBA sidelined on rates, but believe it will be frustrated by the strength of the exchange rate given that it has taken so long for the currency to catch up with earlier steep declines in commodity prices", opines Barclays.

If commodity prices hold at current levels, the model points to the exchange rate being about 6% overvalued by the start of next year, which is almost a one standard deviation divergence.

"In past interviews, the governor has given his take on fair value for the exchange rate, and we think it likely that he would take the opportunity to welcome a fall to the mid-60s against the US dollar", says Barclays in a research note.

Currently AUD is trading at 1.39 against USD, while it is trading at 1.52 versus EUR.