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Bob Mason
The Reserve Bank of Australia Sydney New South Wales Australia

Earlier in the Day:

It was another relatively busy day on the economic calendar this morning. The Aussie Dollar and Kiwi Dollar were in focus early in the day.

Away from the economic calendar, key risks returned into focus, weighing on the U.S futures and Aussie and Kiwi Dollar.

Looking at the latest coronavirus numbers, there was nothing to raise concerns.

On Monday, the number of new coronavirus cases rose by 95,146 to 6,358,217. On Sunday, the number of new cases had risen by 112,809. While the daily increase was lower than Sunday’s rise it was up from 83,824 new cases from the previous Monday.

France, Germany, Italy, and Spain reported 1,018 new cases on Monday, which was up from 991 new cases on Sunday. On the previous Monday, 747 new cases had been reported. Significantly, however, all 4 member states reported less than 300 cases each at the start of the week.

From the U.S, the total number of cases rose by 21,287 to 1,858,457 on Monday. On Sunday, the total number of cases had risen by 20,569. On Monday 25th May, a total of 19,790 new cases had been reported.

For the Kiwi Dollar

April building consents fell by 6.50%, month-on-month in April, following a 21.3% tumble in March.

According to NZ Stats,

  • Compared with April 2019, new homes consented was down by almost 17%, the largest decline since July 2011.
  • The decline was attributed to lockdown measures throughout the month.
  • In February 2020 year, a 45-year record 37,882 new homes had been consented.

The Kiwi Dollar moved from $0.62912 to $0.62914 upon release of the figures. At the time of writing, the Kiwi Dollar was down by 0.16% to $0.6282.

For the Aussie Dollar

On the economic data front, the current account surplus widened from A$1.0bn to A$8.4bn in the 1st quarter. Economists had forecast a surplus of A$6.3bn.

Company gross operating profits also beat forecasts, rising by 1.1% in the 1st quarter. In the 4th quarter, profits had fallen by 3.5%. Economists had forecast another 3.5% decline.

The stats provided some early support to the Aussie Dollar, though the upside was short-lived, with the RBA monetary policy decision the main event.


In line with market expectations, the RBA held the cash rate and yield on 3-year Australian Government bonds of 25 basis points unchanged this morning. Salient points from the RBA Rate Statement included:

  • Domestically, the economy is experiencing its biggest contraction since the 1930s.
  • Total hours worked fell by an unprecedented 9%, with more than 600,000 people losing their jobs in April.
  • Household spending weakened considerably, with investment plans deferred or canceled.
  • The rate of new infections declining significantly and some restrictions eased earlier than had been anticipated, however. It is, therefore, possible that the depth of the downturn will be less than earlier expected.
  • There are signs that hours worked stabilized in May, with a pickup in consumer spending.
  • The outlook, including the nature and speed of the expected recovery, remains highly uncertain.
  • In that period immediately ahead, much will depend on the confidence that people and businesses have about the health situation and their own finances.
  • The substantial, coordinated, and unprecedented easing of fiscal and monetary policy is helping the economy. It is likely that this fiscal and monetary policy support will be required for some time.
  • It was also noted that the Board will not increase the cash rate target until progress is being made towards full employment and it is confident that inflation will be sustainably within the 2-3% target band.

The Aussie Dollar moved from $0.67838 to $0.67900 upon release of the statement. At the time of writing, the Aussie Dollar down by 0.10% at $0.6791.


At the time of writing, the Japanese Yen was down by 0.11% to ¥107.71 against the U.S Dollar.


The Day Ahead:

For the EUR

It’s a relatively quiet day ahead on the economic calendar. Unemployment figures are due out of Spain later this morning.

We don’t expect the numbers to have a marked impact on the EUR, however. The markets expect the COVID-19 recovery plan to support a pickup in hiring in the months ahead. Spain is likely to be a major beneficiary of funds from the EU.

Away from the economic calendar, risk aversion could pin the EUR back in the early part of the day.

At the time of writing, the EUR was up by 0.08% to $1.1127.

For the Pound

It’s a particularly quiet day ahead on the economic calendar. There are no material stats due out of the UK to provide the Pound with direction.

A lack of stats will leave market sentiment towards COVID-19, Brexit and the economic outlook to be the key areas of focus.

At the time of writing, the Pound was down by 0.09% to $1.2481.

Across the Pond

It’s also a particularly quiet day ahead on the U.S economic calendar. There are no material stats due out of the U.S to provide the Greenback with direction.

A lack of stats will leave the market focus on geopolitics as China and the U.S continue to face off. There will also be increased concern over the extended riots and the possible use of military force.

The Dollar Spot Index was up by 0.04% to 97.871 at the time of writing.

For the Loonie

It’s a quiet day ahead on the economic calendar. There are no material stats to provide the Loonie with direction.

A lack of stats leaves the Loonie in the hands of crude oil prices and OPEC Plus action.

At the time of writing, the Loonie was up by 0.13% to C$1.3555 against the U.S Dollar.

For a look at all of today’s economic events, check out our economic calendar.

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