The Australian dollar traded around $0.647, hovering near its lowest level in six weeks, as investors weighed the Reserve Bank of Australia's internal debate over the true restrictiveness of its current monetary policy.

The currency remained under pressure following recent comments from Assistant Governor Sarah Hunter, which highlighted the central bank's reassessment of three key economic shifts. Policymakers are scrutinizing how firms are setting prices in the post-pandemic environment, the ongoing tightness of the labour market, and whether the transmission of policy has changed due to a stronger-than-expected response in the housing market.

With the RBA uncertain if the current 3.6% cash rate is exerting enough restraint to return inflation to its target, market sentiment turned cautious. This uncertainty over the future path of interest rates has been a key factor keeping the AUD subdued.

Further pressure came from a broadly stronger US dollar. The greenback found support after the release of the Federal Reserve's October meeting minutes, which revealed that multiple members of the committee were against implementing more interest rate cuts this year.

Investors are now looking ahead to the release of preliminary Purchasing Managers' Index (PMI) figures later today for further clues on the health of the Australian economy.