Please note that the commentary below is factual information provided to a group of readers as a web blog, and where an opinion is expressed by the author, it is GENERAL ADVICE only.
AUD/USD Hits 0.59:
What was probably inconceivable two months ago is now playing out in front of our eyes, the AUD has over the past month lost 500 points vs the Greenback in one of the sharpest declines on record. Lower interest rates as a result of Covid19 is the culprit, however with the economy already on unstable footing ahead of the Covid19 pandemic a solid nudge was always going to cause some damage to the Australian economy and by default the AUD. In fact AUD is down right across the board and this includes against the GBP, EURO, JPY and even NZD which threatens to fall below parity for the first time since the NZD was floated back in 1985.
The latest retail sales numbers out of the U.S overnight gives us a glimpse of what to expect down the track, with their latest retail numbers slumping by half a percent in the past month and likely to contract further in the short to medium term. We see prelim retail sales numbers out this morning, however it's probably too early to get a solid indication of the hit to the economy of Covid19.
AUS Government Stimulus:
The Australian Government has announced a number of measures to soften the financial blow of Covid19 including cash handouts and business payments and I would be expecting even more measures should we see the number of cases spike across Australia. Rudd's cash handout after the GFC certainly helped avoid a recession in Australia, however I'm not so sure these same measures will work this time around given the hit to tourism, education, retail sales etc etc. The hits will be across the board and industries which appeared solid going into 2020 may even struggle. These are unprecedented times for sure.
AUD EXCHANGE RATES:
AUD/USD – 0.5990
AUD/GBP – 0.4950
AUD/EUR – 0.5435
AUD/NZD – 1.0064
AUD/JPY – 64.501
All Ords (XAO) – 5,332
Gold – A$2,548/oz
Silver – A$21.05/oz
WTI – US$27.15 barrel
DATA RELEASES TODAY:
AUD - Prelim Retail Sales m/m at 11.30am
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