The Australian dollars rose against the greenback on Tuesday, clawing back the previous day’s losses as markets bet on a quick economic recovery in 2021 once corona virus vaccinations are widely distributed.

Early Tuesday in Asia, Sydney Morning Herald (SMH) quoted Australian Prime Minister Scott Morrison who spoke to a local radio station during late Monday. While the national leader praised the government’s activity restriction measures by saying, “The systems are working”, he also shared optimism on easing the border restrictions between Victoria and New South Wales (NSW). The news also conveyed four new cases of the virus found in the nation with NSW recording zero figures for locally acquired corona virus (COVID-19) while Victoria marking three cases.

“There is still a degree of uncertainty as we enter the year, a degree of hope but a degree of uncertainty,” said CommSec economist, Craig James.

James said Australia’s broad success in managing the pandemic would likely support a rapid economic and market recovery and push the Australian dollar towards 78 U.S. cents. “We think as we go into 2021 the prospects are very positive (and) the Aussie dollar will be back in favour in a year which will be much more on growth, here in Australia and globally.”

On the other hand help in the form of government stimulus is also providing support to Aussie. Meanwhile, the U.S. economy is expected to falter with it lagging behind the other majors. Additionally, political risks are expected to rise and the Fed is expected to keep printing money. All of which will be detrimental to the U.S. Dollar. China’s economic growth is also expected to improve, raising demand for Australian commodities such as iron ore.

AUD/USD 4 Hour Chart:

Support: 0.7624 (S1), 0.7584 (S2), 0.7526 (S3).

Resistance: 0.7722 (R1), 0.7780 (R2), 0.7820 (R3).

Amidst all the prevailing catalysts favouring Aussie against greenback we expect a bullish atmosphere for AUD/USD.