Author : Brett Gordon
Despite the RBA delivering a rate cut that was only priced as a low probability a week ago, AUD/USD is up slightly, recapturing the 0.66 handle. To a large degree, this is due to the greenback’s move lower.Risk appetite took a dive overnight with equity markets down and safe haven assets finding support as the number of coronavirus cases outside of China continued to climb rapidly.
With not much local data out today attentions remain focused to headline updates regarding the state of the coronavirus and the global response. With Treasurer Frydenberg hinting yesterday that a stimulus package to boost and support the domestic economy was imminent we turn to Fiscal policy updates as a catalyst to help the AUD track back above 0.66.
USD moved slightly lower through trade on Thursday as markets priced in additional Federal Reserve interest rate adjustments.Having already cut interest rates by 50 basis points earlier this week money markets began pricing in an additional 25 basis point cut for the fed’s next meeting on March 18 and a possible further 25 basis point cut in April. The USD fell against the JPY moving toward 5 months lows and falling below 107 to touch 106.70. With non-farm payroll data the headline macroeconomic item on the agenda today, investors will be looking for sustained strength across the labour market as bastion of stability in the face of broader coronavirus uncertainty.
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