Overnight The Reserve Bank of Australia cut interest rates to a record low 0.25% and announced extraordinary measures to help prevent a coronavirus-driven economic crisis, sweeping globally.
Additionally, the RBA will be buying Australian government bonds as part of their first-ever quantitative easing program, and by providing a three-year funding facility to supply cheap loans for Australian banks. This money will then be used to distribute out to consumers and businesses, to try and stimulate the economy.
Australia's economy has been taking a battering, initially being hit by China’s suffering of the Coronavirus. Remember, China is Australia’s biggest two-way trading partner, they are impacted by the problems in their own economy and that of China’s.
AUD was initially hit on the surprise rate cut, however, managed to see a technical correction during the US session. Vulnerabilities still remain very much tilted to the downside, as AUD is classed as a riskier currency and tends to suffer more.
Despite these dovish measures, the RBA has still left the door open to more potentially. Governor Lowe said:
We are in extraordinary times, and we are prepared to do whatever is necessary to make sure the supply of credit is there for Australian businesses and households. We feel like at the moment we've done enough. If it turns out not be the case, there are other measures we can consider.