Australia has managed to avoid some of the major financial crises in recent times, with the financial crisis of the late 2000’s and 2011 behind some of the most recent examples. The economy also avoided recession during these times and broke records for the longest period of consistent growth. The reasons for this can be put down to both good financial decision making from the Reserve Bank of Australia along with the fortune of being closely tied to the fastest growing global economy in China.
The past 6 months though have been very testing for the country, and this has been reflected in its currency as we have seen the Australian dollar lose value against the majority of major currency pairs. Before the breakout of COVID-19 there were the issues derived from the forest fires and just as the country was trying to overcome this the Coronavirus has provided a shock to the economy, resulting in over 1 million Australians being out of work.
The Australian government is trying to counteract the negative impact to the economy and has so far implemented a historical economic package, the largest in its history, equating to roughly $80bn. The AUDEUR pair hit the lowest level in almost 11-years last month and although there has been somewhat of a recovery, which isn’t unusual after such a dramatic sell-off, the Aussie dollar still has a long road to recovery.
The main issue facing the Eurozone at the moment is the way that countries have begun to turn inwards in regards to the COVID-19 pandemic, and how to overcome this as a trading bloc. There have been disagreements between certain regions regarding the spreading of debt, and this topic could impact relationships between the nations moving forward.
Tomorrow there will be the release of Australian imports and exports, which will be released in the early hours tomorrow, UK time. Later on Eurozone Manufacturing and Services Purchasing Manager’s Index will be released at 09:00; this is an outlook on the sector so there could be a market reaction depending on the figures released.
Get in touch using the the form below for insight into tomorrow’s data release, or to ask another question regarding your currency exchange.e I’ll be happy to get in touch personally and discuss your enquiry.