The Reserve Bank of Australia’s (RBA) Deputy Governor Guy Debelle was out on the wires Tuesday, stating lack of conviction in negative interest rate policy as a tool to boost inflation and employment.

The central bank recently cut rates to a record low of 0.10% and has been buying bonds since the second quarter to contain the economic fallout from the corona virus outbreak.

Historically low rates also made it easier for government to fund its massive fiscal stimulus, said Debelle, adding that the level of debt was “absolutely sustainable”.

Debelle said the RBA’s decision to buy A$100 billion ($72.98 billion) of longer-dated bonds over six months was needed because Australian 10-year yields had been above those in peer nations, putting unwelcome upward pressure on the Aussie dollar.

“This package has materially lowered the structure of interest rates in the Australian financial system,” he said in a speech to Australian business economists. “The decline in interest rates across the yield curve has lowered the exchange rate, relative to what it otherwise would be.”

Australian shares on Tuesday touched their highest level in almost nine months, with energy stocks leading the pack, as positive developments surrounding a potential COVID-19 vaccine fanned optimism about a speedy global economic revival.

AstraZeneca AZN.L said on Monday its COVID-19 vaccine could be up to 90% effective, and cheaper and easier to distribute than rivals, sparking hopes that the fight against the pandemic and its crippling economic fallout may soon be at an end. Risk appetite was also supported by data that showed U.S. business activity expanded at the fastest rate in more than five years in November.

AUD/USD 4 Hour Chart:

Support: 0.7254 (S1), 0.7223 (S2), 0.7182 (S3).

Resistance: 0.7326 (R1), 0.7368 (R2), 0.7398 (R3).

Steps by the Australian government by buying bonds favors Aussie against greenback, we expect a bullish trend for AUD/USD.