Glenn Stevens takes his foot off the AUD

The Reserve Bank of Australia is sweating on next month's US Federal Reserve meeting and the first potential rate hike in nine years after governor Glenn Stevens signalled the dollar's 22 per cent plunge over the past year is doing enough to boost the economy.

For the first time this year, Mr Stevens dumped his demands for a lower dollar, increasing chances the next move by the Reserve Bank board will be an interest rate hike rather than another cut as forecast by financial markets.