At its Aug.4 policy meeting, the Reserve Bank of Australia (RBA) held its cash rate at a record low of 0.25% in an expected decision. It slashed rates in an emergency meeting in March. Australia’s central bank does not need to further ease policy for now as its package of measures was working broadly as expected with an economic recovery underway in most of the country, minutes of its August policy meeting showed on Tuesday.

As per the RBA minutes, The Board reaffirmed the elements of the policy package announced on 19 March 2020, namely: a target for the cash rate of 0.25 percent, a target of 0.25 percent for the yield on 3-year Australian Government bonds, the Term Funding Facility to support credit to businesses, particularly small and medium-sized businesses, an interest rate of 10 basis points on Exchange Settlement balances held by financial institutions at the Bank.

The Board affirmed that the yield target for 3-year bonds would be maintained until progress is made towards the Bank’s goals of full employment and the inflation target, and that it would be appropriate to remove the yield target before the cash rate itself is raised. The Board determined that it would not increase the cash rate target until progress is made towards full employment and it is confident that inflation will be sustainably within the 2-3 percent target band.

Other than the upbeat data, the lowest prints of the corona virus (COVID-19) cases in Australia’s epicenter Victoria also helps the Aussie pair to remain firm. The latest figures suggest new cases rose 222 while there were 17 more deaths due to the pandemic on Monday. The figures were the lowest since July 18. However, news that the city of Sydney was added to the New South Wales (NSW) COVID-19 hotspot covered the optimism.

On the other hand, the US-China tussle continues, A former Central Intelligence Agency and FBI officer was arrested and charged with spying for China in a years-long operation, the US Justice Department said on Monday. Alexander Yuk Ching Ma, aged 67, according to court documents, was arrested on Friday on charges of conspiracy to communicate national defense information to aid a foreign government and faces a maximum penalty of life imprisonment if convicted, the Justice Department said.

AUD/USD 4 Hour Chart:

Support: 0.7180 (S1), 0.7147 (S2), 0.7123 (S3).

Resistance: 0.7236 (R1), 0.7260 (R2), 0.7293 (R3).

The optimistic RBA minutes release favors Aussie against greenback. We expect a bullish trend for AUD/USD.