The Aussie benefited from the encouraging coronavirus situation at home but worsening Sino-American relations and concerns about the US economy limited further gains, NDDFX’s analyst Yohay Elam briefs.
“Unless there is a surprising second wave in Australia, the pace of reopening could have an impact on the Aussie, with the gradual return to normality supporting the Aussie.”
“Economists are expecting a considerable loss of jobs, yet minuscule in comparison to the crushing seen in other developed economies. Australia’s unemployment rate will likely remain well below 6%.”
“There is bipartisan criticism in the US against China. While this remains in the realm of politics and rhetoric, investors could learn to shrug it off. However, moving toward new tariffs or canceling the trade agreement could deal a blow to sentiment and the Aussie, a risk currency.”
“The US economy is suffering, and further evidence of that will likely be seen in the retail sales numbers for April, which could experience double-digit falls after tumbling in March by over 8%.”