The AUD v EUR exchange rate finally saw some strength after a recent downtrend that has lasted almost nine days. The AUD to EUR pair was up 0.5% in the European session and trading at 0.5320.
Employment Figures Are Positive but Hide Virus Impact
The Aussie currency got a boost as headline employment figures showed a rise of 26k jobs versus 6.5K expected, whilst the unemployment rate dipped to 5.1%. At this level the participation rate was the highest in 20 years. Despite these numbers, traders still noted that those in employment but not working enough hours hit 1.18 million, which was a record high and this has raised fears for future numbers amidst the current crisis.
The employment figure has been a key data set for the Australian government in recent months and it would normally mean that rates would stay on hold in next week’s meeting, but central banks have been taking extreme measures across the globe and the RBA may follow suit to try and get ahead of the curve.
Travel Ban Now in Force in Australia
Australia’s biggest airline has said Thursday that it will halt all international flights. Qantas said that international flights would be suspended by late-March, and for at least two months, after the government advised citizens to forego overseas travel in a bid to halt the spread of coronavirus.
“The efforts to contain the spread of coronavirus have led to a huge drop in travel demand, the likes of which we have never seen before,” Qantas chief executive Alan Joyce said. The firm also noted that they would suspend 20,000 of its 30,000 staff during the shutdown.
This is an unprecedented time and although the Australian economy will suffer, it is unlikely that the European economy will fare any better in the coming months. Traders are still contemplating the outlook for the currency pair and the Aussie may find further support if the spread worsens in Europe.
The European IFO business sentiment index fell to 87.7 points in March, which is now at its lowest level since 2009. The number is usually a market-mover, but analysts were prepared for a gloomy outcome and the release did little to impact the single currency.
Australia saw its number of virus cases rise to 709, yet the number in Spain is now 17,000 in Spain alone so maybe traders are underestimating the impact that the virus will have in Europe’s economy.
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