The Australian dollar has fallen after the latest Reserve Bank minutes revealed board members think an interest rate cut could be "appropriate" if unemployment rises and inflation remains weak.

Key points: Reserve Bank board members discussed a scenario for interest rate cuts at April meeting

Reserve Bank board members discussed a scenario for interest rate cuts at April meeting The Australian dollar fell to lows of around 71.4 US cents following the minutes' release

The Australian dollar fell to lows of around 71.4 US cents following the minutes' release The RBA appears less confident about the jobs market, noting "mixed" indicators

The minutes of the April board meeting, which saw the central bank's board leave rates unchanged for a record 29th consecutive meeting, show a discussion of what it would take for the RBA to cut the cash rate.

"Members also discussed the scenario where inflation did not move any higher and unemployment trended up, noting that a decrease in the cash rate would likely be appropriate in these circumstances," the minutes read.

However, the RBA board did not appear in any rush, agreeing there was not a "strong case" for any near-term move.

"Members recognised that it was not possible to fine-tune outcomes and that holding monetary policy steady would enable the [RBA] to be a source of stability and confidence," the minutes read.

The Australian dollar fell from above 71.7 US cents before the minutes' release to lows around 71.4 US cents.

JP Morgan chief economist Sally Auld said the explicit discussion of the rate cut scenario was "consistent with the Bank's gradual journey towards a more dovish policy stance".

Capital Economics, which has forecast multiple cuts to the cash rate to take it to 0.75 per cent by early next year, said the RBA was "moving closer" to cutting and minutes suggest "it won't take much for the bank to cut interest rates".

A line from the previous month's meeting minutes stating that the probabilities of scenarios that could prompt a rate cut and a rate hike were "more evenly balanced" was not included in the April minutes.

"Unlike some commentators, we don't read anything into the absence [of the sentence]," said Citi economists, who are forecasting no change this year.

"Today's minutes make it crystal clear that the bank is not in any hurry to consider cutting the cash rate."

Rates hinge on jobs and inflation

Strength in the jobs market has been central to the Reserve Bank's rationale for not cutting interest rates, despite slowing growth and low inflation.

Deputy governor Guy Debelle noted the tension between strong jobs growth and weak economic growth in a speech last week and said the RBA was looking for a "resolution" to the tension in upcoming data releases.

In the April meeting minutes, board members appeared less confident in the jobs outlook than in previous months.

"Forward-looking indicators of labour demand had been mixed in recent months," the minutes said.

"Job advertisements had eased, but job vacancies reported by employers through the ABS survey had increased further as a share of the labour force in February."

Economists surveyed by Reuters are tipping jobs figures to be released on Thursday to show the unemployment rate edged higher in March, from 4.9 per cent to 5 per cent.

"We expect forthcoming labour force prints to reinforce the view that the unemployment rate has begun a gradual move higher," said JP Morgan's Sally Auld, who is forecasting two 25 basis point cuts to the cash rate by year-end.

The Reserve Bank also weighed up the effectiveness of cutting rates should it have to, with board members noting that the impact on the economy could be expected to be smaller than in the past.

"Nevertheless, a lower level of interest rates could still be expected to support the economy through a depreciation of the exchange rate and by reducing required interest payments on borrowing, freeing up cash for other expenditure," the minutes said.