The slight recovery of the Australian dollar is supported by the weakening of the US dollar. Signals from US Federal Reserve policymakers suggest that there might be a rate cut soon. According to CME FedWatch, there is a 61% chance that interest rates will be cut in September.

Loretta Mester, President of the Cleveland Fed, warned in an interview with Bloomberg that inflation risks still exist and could increase further.

Meanwhile, investors are turning their attention to the May meeting, which will be published on Wednesday. Policymakers are expected to keep interest rates unchanged due to the persistently high inflation.