The Australian Dollar Hits Decade Low but It's "Not Cheap" Says Westpac

The Australian Dollar hit its lowest level since March 2009 Wednesday as investors continued to count the possible cost to the global economy from the spread of the new coronavirus, although strategists at Westpac have preemptively told clients the antipodean currency is "not cheap."  

The Australian Dollar is mixed at the start of the new week, trading lower against the traditional 'safe haven' currencies such as the Dollar, Yen and Franc amidst a resurgence of coronavirus jitters in global markets. However the Australian unit is notching up some gains against the likes of Sterling and the Canadian Dollar.

The Australian Dollar was down on Thursday and could fall further over the coming weeks as financial markets price-in an interest rate cut from the Reserve Bank of Australia (RBA) in response to what was a dire January jobs report.

The Australian Dollar shifted onto the front foot amid a rebound in risk appetite Wednesday but will be confronted in the overnight session by January jobs data that risks prompting a reversal of the recent repricing of the Reserve Bank of Australia (RBA) interest rate outlook. 

The Australian Dollar underperformed on Tuesday as it followed the Chinese Yuan lower as market concerns over the possible economic impact of the coronavirus escalated, which has helped to sustain a steady uptrend in the Pound-to-Australian Dollar rate. 

The Aussie gained at the start of the new week amidst news that the People's Bank of China introduced fresh stimulus measures to try and offset the negative impact to the economy of the coronavirus outbreak. The PBoC offered RMB 200B of one-year MLF loans today, lowering the rate charged by 10bp to 3.15%.

The Australian Dollar is however the week's second best performing major amidst declining expectations for an interest rate cut at the RBA, but we are told by one leading foreign exchange analyst the Aussie Dollar will struggle over the course of the first half of 2020, suggesting further GBP/AUD advances are possible.

The Australian Dollar was riding high on Thursday after being cheered by commentary from the Reserve Bank of Australia (RBA) overnight although local firms are warning the antipodean unit is now at risk of losses as coronavirus concerns threaten to make themselves felt in currency markets again,.