AUD/USD defends 0.7420 amid USD retreats, RBA minutes

• AUD/USD prints gain on Tuesday in the initial Asian session.
• The US Dollar Index breaks 94.00 amid risk-on sentiment.
• RBA minutes, higher commodity prices, and risk-on mood aid aussie gains.

AUD/USD is picking up the bid, following the release of the Reserve Bank of Australia (RBA) minutes. The pair opens lower and touched an intraday high of 0.7248 before testing the low of 0.7406. At the time of writing, AUD/USD is trading at 0.7421, up 0.12% for the day.

The Reserve Bank of Australia (RBA) in its latest monetary policy meeting minutes showed that the central bank remained optimistic about the economic growth. The economy is expected to recover by  December 2021 and to the pre-pandemic level in the second half of 2022. The board members acknowledged that the delta variant interrupted the economic recovery. Despite higher growth projects, the central bank retreated its no interest hike rate stance until the inflation is stable within the 2-3% target band.

In addition to that, China’s growth concerns weighed on the sentiment. Chinese Q3 Gross Domestic Product (GDP) fell 4.9% on a YoY basis, falling below the market consensus of 5.2%. Nevertheless, higher commodity prices provide some support as AUD held six-week highs on the back of higher commodity prices. It is worth noting that the S&P 500 Futures is trading at 4,477, up 0.02% for the day.

The US Dollar Index (DXY), which tracks the performance of the greenback against its six major rivals fell briefly below 94.00.

As for now, traders await US Housing Start, and Building Permits to gauge the market sentiment. 

AUD/USD additional levels