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🇦🇺 Australia is on the verge of recession⠀
⚠️ The country is considered a key supplier of industrial raw materials to China, which has consistently attracted AUD speculators. The
Aussie's correlation with the Chinese economy is gradually weakening, but will export be able to pull Australia out of economic collapse again?
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In theory, the weakening of the national currency should help exporters, but the economic recovery in China has seriously slowed down in the last quarter and the AUD/USD rate is steadily drifting downward.
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Last week, the RBA kept its interest rate, but canceling financial easing is still topical; analysts are talking about a W-shaped recovery and a double recession if the quarantine restrictions drag on.
Aussie reacted poorly to the RBA's quarterly report and Philip Lowe's speech in parliament. Despite the too positive outlook of the RBA, the market noticed too many “ifs” in the optimistic rhetoric of the head of the Central Bank.
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Lowe admitted that reducing QE was discussed, but in the end, he confirmed a decrease in the buying volume of government bonds only since September - from the current $5 billion to four. The NAB Business Confidence Index and housing market statistics for July showed the maximum growth in property prices. The RBA believes that despite the ongoing lockdown, the economy will be recovering faster than expected, especially in the labor market, where key indicators have returned to pre-crisis levels. We will be waiting for confirmation of these facts tomorrow and Friday.
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Profits to y’all!