The Aussie nearly takes the top spot this week as risk sentiment swung positive on massive stimulus measures from the world’s governments & central banks.
Australian Headlines and Economic data
- Australia Passes Massive Stimulus Measures as Virus Spreads
- Early drop lower for the Aussie on Monday, likely due to the continued negative risk sentiment fueled by the ongoing coronavirus pandemic and likely economic damage to the global economy. It’s also likely the the failure of the stimulus bill to pass the U.S. Senate added to market fears.
- It was a quick turn around in sentiment, though, during the U.S. session towards positive, likely sparked by a pledge from the Federal Reserve to support the markets with no limits.
- Australia’s manufacturing PMI deteriorates but benefits from lower Chinese output
- Australia consumer confidence falls to 72.2; lowest level since last recession
- RBA pumps 6.9 billion AUD into the financial system
- Ban on overseas travel as Scott Morrison extends social restrictions across nation
- Positive global risk sentiment was on the rise through Wednesday to support the Aussie, likely on the continue stream of pledges from governments and central banks along with the RBA’s actions mentioned above (ECB Intends to Be Major Buyer in Commercial Player Market, Canada doubles value of coronavirus stimulus package, etc.) to shield the world from an economic meltdown.
- Warning of Economic Crisis, Australia Avoids Full Virus Lockdown – The Aussie turned lower on the session, possibly on the news from Australia of further restrictions like closing businesses down and urging citizens to stay at home.
- RBA extends government bond purchasing program
- The Aussie turned higher during the Thursday session, likely on the continued rise in global risk sentiment, once again on more news of stimulus measures to support the global economy (e.g., ECB shakes off limits on new €750bn bond buying plan, U.S. Senate passes $2T disaster aid bill, South Korea to relax FX liquidity rules for banks, India cuts rates & unleashes $50B in stimulus, etc.)
- Risk sentiment soured a bit on Friday, possibly on traders fearing that the U.S. stimulus bill may hit a snag and on the continued acceleration of cases around the globe. Fortunately for a lot people out there hurt by the coronavirus pandemic, the bill was later passed and signed by President Trump in the afternoon session, sparking some flows out of safe havens (and the Dollar) and into the risk currencies like the Aussie into the weekend.