Global economic optimism created due to the covid vaccine rollout weighs on the safe haven asset – greenback. Along with that, the RBA monetary policy, Lower Treasury yields seems to favor the Aussie.

As per the Australian RBA minutes, Australia’s economic recovery has surpassed all expectations with an “above-trend” expansion likely this year. The country’s central bank is still in no hurry to tighten policy settings, minutes of its April policy meeting showed on Tuesday.

The Reserve Bank of Australia (RBA) left the rates at a record low at 0.10% at its April 6 meeting while reiterating its commitment to keep policy accommodative for as long as is necessary to pull down unemployment and push inflation higher.

The minutes showed the RBA would maintain this supportive policy stance until actual inflation is sustainably within its 2-3% target range, a goal it does not expect to meet before 2024.

“Overall, preliminary data suggested that GDP in the March quarter was likely to have recovered further to around its pre-pandemic level, earlier than previously expected,” the minutes showed.

“Despite these generally positive developments, wage and price pressures had remained subdued and were expected to remain so for several years,’ according to the minutes.

Elsewhere, People’s Bank of China (PBOC) matches wide market expectations of keeping the benchmark rates unchanged. The PBOC keeps one-year and five-year around 3.85% and 4.65% respectively during the latest monetary policy meeting.

US President Joe Biden’s readiness to alter some parts of his $2.25 trillion infrastructure spending to favor the market optimism.

AUD/USD 4 Hour Chart:

Support: 0.7711 (S1), 0.7670 (S2), 0.7633 (S3).

Resistance: 0.7790 (R1), 0.7827 (R2), 0.7868 (R3).

RBA monetary policy along with the weaker U.S. Dollar favors the Aussie against the greenback. We expect a bullish trend for AUD/USD.