Fundamental To The Australian Dollar Forecast: Bearish
- The Australian Dollar gained along with other assets, with a risk profile similar
- However, with the imminence of a global recession is likely to see these assets in their chances rethought
- There are a lot of painful dates to come, just not in the coming week
The Australian Dollar faces a week-or, rather, analyses the domestic economic news, which is an all-too-likely-to-leave-the-corona virus in charge of the direction of the market.
Investors can look forward to the challenge, or On 5 may, the monetary policy meeting at the time of the Reserve Bank of Australia, but they are struggling to add much to the backdrop already in place. The central bank has left its interest rates at a record low this month, after you have reduced sharply in March.
However, the markets already know that all the stimulus options remain on the table at the RBA, and that it expects this year, the first half is extremely dark. Decision-makers may not be convinced that the drop rate to help very much, but the prospect of increases, or, indeed, any form of monetary tightening, it is now a long way in the future. The minutes are not to change this perception, and when they are released on Tuesday.
More than Half a Million Australians have Lost Their Jobs in the Last Month
The last indicator is the Australian unemployment data have been catastrophic, but, all in all, not more than expected. All in all, job losses, or 594,300 beat forecasts, but the unemployment rate came in better than expected. However, with this rate, at 6.2%, and the RBA is predicting a peak above 10%, the market will be strengthened for a more terrible work data in the coming months,
All, this does not look like a particularly favourable environment for the Australian Dollar, but, given the difficulties of every national economy in the face of the Covid epidemic, its arguable-that-the-wise, is no worse off and on a comparative basis.
However, all these growth-correlated assets have seen their upward momentum wane in the last two weeks. AUD/USD advanced, on the 29th of April, to 65.69 has not been overcome, even if it’s not too far from its current level.
Huge monetary bailout programs exercise to their lows of March by heading to the play on the occasion of the explosion of the credit crunch. But they still have to deal with the global recession, and the possibility that the re-opening of the economies is going to be a little more difficult to close them.
With this in mind, it is a cautiously bearish call again for the Australian Dollar this week.
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