The Australian Dollar found support. Overview for 03.03.2020
AUDUSD continues the trend reversal; this time, with some support from the Reserve Bank of Australia.
The Aussie continues recovering against the USD after the RBA’s decision. The current quote for the instrument is 0.6542.
Today’s meeting of the Australian regulator ended quite unexpectedly: the RBA decided to cut the rate from 0.75% to 0.50%. Market players anticipated such a move, but they weren’t sure that it might happen so soon.
By the way, the Australian rate has been reduced for the fourth time in less than 12 months.
In the comments, the RBA said that the decision was aimed at decreasing possible negative consequences of the coronavirus transmission all over the world. The Australian economy is very closely connected to China, so the RBA’s decision seemed pretty logical after a lot of minor statistics from China published yesterday.
It’s known that the coronavirus outbreak has already affected Australia’s travel industry, as well as the mobility sector and retail sales. This impact may get more serious in the future, that’s why the rate cut may “soften” it a little bit.
However, one shouldn’t exclude a possibility that the RBA’s decision to cut the rate might be supported by other global central banks.