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AUD/USD: Set for another plunge down under

The thrill is gone as the AUD/USD’s sugar rush faded out. As COVID-19 continues spreading around the world, the risk-off sentiment is weighing on the Aussie. Yohay Elam from NDDFX analyzes the AUD/USD outlook for the next week.

Key quotes

“Updates on the disease remain left, right, and center. An increase in COVID-19 cases in Australia may weigh on the Aussie. If China returns to lockdowns, it would also be a disappointing sign.”

“The RBA’s rate decision stands out on the economic calendar. Governor Phillip Lowe and his colleagues may decide to wait for more developments before expanding the program, but the fast pace of events means anything is possible.”

“The US greater fear is for a rapid rise in deaths, which may pass 10,000 in the coming days. The few holdout states are likely to impose ‘shelter in place’ orders, and others may extend their lockdown. The pace of closures may impact market sentiment.”

“Lawmakers are already mulling another fiscal package as $2.2 trillion may be insufficient to tackle the magnitude of the shutdown. If another plan is pushed forward, it may improve the mood and drive the dollar down.” 

“Jobless claims remain the most significant figure due to its freshness. The number of applications is unlikely to fall below five million and may even exceed ten million.”

 

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