AUD price forecast:  Australian Dollar at Mercy of COVID-19 as China's Economy Slows

AUD price forecast: Australian Dollar at Mercy of COVID-19 as China's Economy Slows

Posted by WheelsAPE Finance Team on 18th Mar 2020

At WheelsAPE We provide you with all the information you need to purchase products, including the best foreign exchange strategy. To help you save money.

Key points of our advice:

1. Due to the rapid decline of the Australian dollar against the US dollar, we will make all adjustments to the Australian dollar at the end of March 2020, which will be announced on 27 March 2020. 

2. We recommend that our Australian customers settle their order and payment in Australian dollars before this date to avoid any additional charges. 

3. Customers who have already paid a deposit in USD and have locked in an order and settled their final payment within 15 days will not be affected.

The RBA cut rates by 25 basis points at its March meeting to combat the economic impact of the COVID-19 outbreak. Minutes of the meeting, released on March 17th, show that the committee believes that interest rate cuts support jobs and the economy at a time when the epidemic is affecting them. 

To support the economy, the sub-committee is prepared to ease policy further and, if necessary, to keep interest rates low for an extended period.

The committee said the outbreak had significantly increased the damage to the global economy, and that there was little chance that it could be contained in the short term, and agreed to maintain communication and assess the economic impact of the outbreak.

Australia's GDP growth in the first quarter was much weaker than expected, making it difficult to assess how long the slowdown will last.

The  AUD / USD market reaction was muted after the minutes were released. The Federal Reserve and New Zealand's Central Bank cut interest rates by 100 points and 75 points respectively on Monday to fight a deepening recession and boost confidence. But for now, the RBA is unlikely to do the same. But the market is already 100% priced and the RBA will cut rates by another 25 basis points at its next meeting. The outlook for the Aussie dollar remains bearish, at least until the RBA's next meeting, with the downside target set at a 2008 low of 0.6001.


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