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Feb 26 - 07:24 AM

AUD/USD - COMMENT-Whatever Way You Look At, It AUD/USD Goes Down

By Jeremy Boulton  —  Feb 26 - 05:30 AM

AUD/USD has been battered by the coronavirus, which has driven down commodities and hit any currency linked to an economy with close ties to China nL2N2AQ03O.
Australia's dollar probably tops the list of such currencies, but it's worth remembering that AUD/USD is also a sell when the going is good.
Australia's dollar swings with risk appetite, so right now it's heavy across the board.
Where it might rebound if fear surrounding the coronavirus subsides, AUD/USD shouldn't.
That's because the pair is weighed by an interest rate gap that favours the U.S dollar and that isn't likely to change.
Rates in both nations can come down and may fall if the situation worsens.
If the situation improves, Australia's economy, which has also been hurt by bush fires, will still need the help of low rates.
The economy in the United Sates won't.
The rate gap is more likely to widen and AUD/USD is likely to keep sliding whatever happens with the coronavirus.
Related nL2N2AO05S




AUDUSD: Click here

Source:
Refinitiv IFR Research/Market Commentary

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