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Weekly roundup: Sharpest quarterly slowdown on record fuels Australian dollar slump

currency-newsWeekly roundup: Sharpest quarterly slowdown on record fuels Australian dollar slump
With a rebound in the US Dollar at the end of last week, the Australian dollar suffered a sharp decline on the back of a worse-than-forecast second quarter gross domestic product report.

Growth showed its largest quarterly decline on record, clocking in at shocking -7% instead of the 0.3% forecast, pushing the country into its first recession in 30 years.

While recent Chinese trade data suggests that the global economy could fare better in the third quarter, this failed to give the Australian dollar any significant boost.

The latest Reserve Bank of Australia’s (RBA) latest policy meeting also weighed on AUD exchange rates. While the RBA maintained current policy, they did acknowledge that Victoria’s extended lockdown has set back economic recovery.

On top of this, the announcement that Victoria’s state of emergency is being extended added additional pressure to the ‘Aussie’.

Meanwhile, another underwhelming performance this week from the Westpac consumer confidence index would put a dampener on the Australian dollar.

Lower levels of consumer confidence would add to bets that the Australian economy may remain in a sluggish state for the foreseeable future, even if wider market conditions show signs of improvement.
 
Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

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