The USD/AUD remains close to the unprecedented levels of 1.70 as the coronavirus outbreak continues to play havoc on the Aussie. The rate has fallen back slightly from the 1.73 highs, however with the volatility in the market at the moment the rate can swing by several cents on a daily basis.
US Federal Reserve Economic Support Package Approved
Last night in the US the Senate passed a bill that will see the largest ever US Government stimulus package, which comes in at the tune of $2tn and means any American worker earning under $99,000 will receive a $1,200 cheque each month. There will also be around $500bn of lending available to businesses in order to keep them afloat during this difficult period. In the next few days this Bill could be turned into law and may help to bring some confidence into the US economy, potentially helping the US dollar strengthen.
China Back to Normal?
From the Aussies point of view the talk that China could be going back to work as normal in the very imminent future may bring some respite to the AUD. As China is their biggest trading partner the return to normality will allow products and goods to start to once again be produced. Whilst it’s unlikely many goods at the moment will be shipped round the world, any major backlogs could be filled during this space of time.
There will be increased demand from China for the raw materials that are produced in Australia so this could mean a bit of a boost once we move past the virus. The levels that the USD/AUD have got to are significantly higher than anything in the last decade so some level of normalisation could help the Aussie to make some of the ground it has lost back up.
The US will today release their biggest economic data with the jobless claims and this is expected to be well into the millions which is one of the record highs. With the recent disruption there is a lot of people expected to have lost jobs and now claiming state support. Look out for this in the late afternoon as the release is due then.
For more information on AUD exchange rates for an upcoming currency transfer, you can contact myself, Ben Fletcher, using the form below.