Global risk appetite has rebounded in the past 48 hours with equity markets up for a second consecutive day and major currencies stronger versus the Dollar.
Markets have seized on signs that the spread of coronavirus in some hotspots may be easing and that there is more fiscal stimulus to come globally. Japanese policy-makers announced today a $1 trillion fiscal package, US President Trump has given his support for a massive infrastructure spending program and EU Finance Ministers, who were “meeting” today are expected to announce a €500bn bailout-fund.
Sterling, the Euro and Kiwi Dollar are all up about 1% against the US Dollar in the past 24 hour but it’s the Australian Dollar which has outperformed, with AUD/USD climbing to a 3-week high of 0.62. The Reserve Bank of Australia left its policy rate unchanged today at 0.25%, in line with expectations, and the accompanying statement had little new content. After weeks and months of economic turmoil in Australia and unprecedented monetary policy measures markets may have welcomed the status quo.
