S&P: Risks to Australia’s AAA rating remain tilted to the downside

Dhwani Mehta FXStreet

S&P Global Ratings is out with its assessment of the Australian economy, underscoring the downside risks after the Federal government announced the 2020-21 Budget.

Key quotes

“Expect the Australian economy to begin to recover during 2020-21.”

“Australia 'AA' rating can absorb growing deficit.”

“Treasurer's economic and fiscal update is consistent with the ‘AAA’ rating and negative outlook.”

“Believes the government remains committed to fiscal discipline.“

“Risks to our rating remain tilted toward the downside.”

“Expects the Australian economy will begin to recover from recession during fiscal 2021.”

Market reaction

The aussie dollar is unperturbed by the above headlines, as AUD/USD keeps its tight range below 0.7150 amid US-China tensions, awaiting fresh cues in the day ahead.

The spot trades flat at 0.7135, at the time of writing.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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