Australia's monetary policy outlook, developments surrounding the overall risk outlook and the country's domestic situation regarding the coronavirus are the primary drivers of AUD.
As a high-beta currency, AUD has benefited from the market's improving risk outlook over recent months as participants moved out of safe-havens and into riskier, higher-yielding assets. Risks still remain, however, with regards to both the global economic outlook and
the coronavirus outlook. Nevertheless, with many countries now rolling out vaccines programs, the outlook remains overall positive, a factor which should prove supportive for AUD.
Regarding its monetary policy outlook, the RBA continues to rule out NIRP, and with the Cash Rate now at a record low of 0.10%, further reductions appear unlikely. However, further easing remains a possibility through quantitative easing and the central bank has
stressed its commitment to purchase as many bonds as necessary to reach and maintain their 3-year yield curve control target of 0.10%.
As a high-beta currency, AUD has benefited from the market's improving risk outlook over recent months as participants moved out of safe-havens and into riskier, higher-yielding assets. Risks still remain, however, with regards to both the global economic outlook and
the coronavirus outlook. Nevertheless, with many countries now rolling out vaccines programs, the outlook remains overall positive, a factor which should prove supportive for AUD.
Regarding its monetary policy outlook, the RBA continues to rule out NIRP, and with the Cash Rate now at a record low of 0.10%, further reductions appear unlikely. However, further easing remains a possibility through quantitative easing and the central bank has
stressed its commitment to purchase as many bonds as necessary to reach and maintain their 3-year yield curve control target of 0.10%.