The Australian Dollar rose yesterday after its central bank; the Reserve Bank of Australia announced its interest rate decision. The decision left the interest rate at 0.75% which markets had predicted. Though the outcome was on many investors’ minds, Australia has not had it easy over the past few months with a decline in its economic figures as well as the bushfires which heavily drained the country’s resources. Some expected that this could cause a shock twist of fate for the RBA’s decision, but it seems AUD is safe for now. As a result of the decision, the Aussie dollar rose but it still has some way to go to challenge GBP as the pair trade around 1.9145 for GBP/AUD.
RBA Helps Australian Dollar’s Outlook With a Cash Rate Hold
Yesterday’s decision by the RBA saw the Australian interest rate remain fixed at 0.75%. The news was welcomed by AUD investors and now sees the currency trading higher than the days previous. But for now, the AUD appears to be on a positive path as we reach mid-week. A combination of the market’s return to risk as well as an optimistic tone from the RBA has left AUD exchange rates performing up near the top. The RBA’s optimism came as a shock considering the threats to the economy from the coronavirus outbreak and the bushfires last month. The central bank noted that it is watching situations closely but remains positive that the events will not make a significant impact to Australia’s economic outlook.
Markets Calm Over the Coronavirus Scare, AUD Benefits From Market Risk Return
The panic surrounding the coronavirus has plagued the Australian dollar for several weeks as investors worried about the economic impact the disease would have on both domestic and global trading. However, the markets risk appetite appears to be on the mend. With no new shocks from the virus over the weekend, the market has calmed a little this week which helped the AUD in its pursuit.
Looking ahead for the Australian dollar, its domestic data could return positive results which would add further support to the AUD. But the ongoing spread of the coronavirus will still have its part to play in limiting the Aussie’s success and any shocks regarding the outbreak will likely negatively impact the AUD.
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