Australia's Victoria State expected to report more than 700 coronavirus cases and up to 13 deaths.
Meanwhile, the Aussie has been riding the coattails of a risk-on market in hope of a vaccine and continued stimulus from both central banks and governments.
All eyes on the RBA next week
However, the fact that unemployment rate was forecast to hit 9.25% by the end of this 2020 and could hit 10.75% depending how businesses “allocate available hours amongst existing employees versus hiring new workers” according to Australian Treasurer Josh Frydenberg, there is a bearish case-building around the spread of the virus in Aus.
That would be the highest unemployment rate in 26 years.
The treasurer also forecast a budget deficit of $184.5bn in 2020/21.
Westpac’s Chief Economist Bill Evan s emphasised that the assumptions on the reopening of the Australian economy were the “most optimistic that you can have”, implying downside risks to the budget deficit forecasts given COVID cases in Victoria hitting fresh records.
In other key statements from the RBA, its Governor, Philip Lowe, stated that “you can't at the moment make the case [the Australian dollar] is misaligned” in his speech to the Anika Foundation.
Traders quickly took that signal to mark the AUD sharply higher.
Next week is the RBA, so the value of the currency will be a keen subject to watch out for, especially considering how far the greenback has continued to travel into the abyss.
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