Australian Dollar failed to support the wave of growth. Overview for 01.12.2020

On Tuesday afternoon, the Australian dollar in pair with the US dollar is correcting upon sky-rocketing yesterday. The current quotation is 0.7365.

At the December meeting, the Reserve bank of Australia left the interest rate without change at 0.1% per annum. Neither it changed its credit and monetary policy. RBA representatives commented that the consequences of the pandemics would take time and effort to eliminate.

The RBA plans to keep the interest rate low for as long as the economy really needs it. The bank especially noted the crisis in the healthcare sector that would hold back the development of macroeconomy later on. Good news about the vaccine that emerge frequently in the media enhance social moods. However, even with such a backup the RBA remains realistic and does not expect the GDP to recuperate until the end of 2021.

Moreover, the RBA expects a certain increase in the unemployment levels. This is inevitable regardless of the measures taken by the regulator and the government. According to the freshest data, the unemployment rate in October amounted to 7%. The CB expects the lengthy period of high unemployment rates and excessive processing powers will together lead to an increase in earnings and prices. Simultaneously, the RBA and government realize that solving the unemployment issue is the key national priority – and are reasonable enough to say it out loud.