(MENAFN - Daily Forex) So far this week, the Australian dollar has advanced against the US dollar, gaining 0.08 percent and continuing its three-week gaining streak, raising concerns about the appreciation of the US dollar. It seems that the Australian dollar has been benefitting from the greenback's recent weakness, which has lost 0.23 percent against a bundle of its main competitors.
The Reserve Bank of Australia recently released its notes, in which the Reserve Bank states that members are not willing to set negative interest rates yet and that any further action would involve the expansion of the bank's bond purchasing program. The notes also state that monetary and fiscal stimulus will be needed for a long term, and that cash rates will not be raised for the next three years.
A special focus was placed on the current low interest rate levels which, according to the board, is affecting exchange rates and asset prices. This could push the bank to further lower its interest rate levels, which currently stand at 0.1 percent. According to Bank Governor Phillip Lowe, if other central banks decide to bring their cash rates into negative territory, the RBA would be forced to follow them.
The coronavirus crisis seems under control in the Australian territory. Nevertheless, the State of Victoria recently decided to restrict its border given the surge of cases in southern Australia. So far, 27,785 cases have been reported on the island, as well as a death toll of 907.
On Wednesday, the Australian Bureau of Statistics reported that the Wage Price Index stood at 1.4 percent in the third quarter (year-on-year), after being at 1.8 percent in the previous month. The figure was lower than expected, as analysts predicted it to be at 1.5 percent. In monthly terms, it stood at 0.1 percent, also lower than analysts' expectations of 0.2 percent and lower than the previous month's figure, which stood at 0.2 percent.
Unemployment figures for October were lower than expected. The unemployment rate in October was at 7 percent, an increase from the previous month's 6.9 percent but lower than analysts' expectations of 7.2 percent. Employment change was at 178,800 after a change of 29,500 in the previous month, also beating analysts' expectations.
Full-time employment went up by 97,000 last month after a decrease of 20,100 in September. Similarly, part-time employment increased by 81,800, after going down by 9,400 in September. The participation rate stood at 65.8 percent, increasing from the previous month's 64.8 percent, and was higher than analysts' expectations of 64.7 percent.
Tensions with China, Australia's main trade partner, have also been on the rise. Regarding this, Reserve Bank of Australia's Governor Phillip Lowe said that there is a need to keep a strong trading relationship with the Asian country. The government has been also making efforts to get closer to Beijing, though not enough, according to the Chinese. China has stated that Australian representatives should ''take concrete actions to correct their mistakes”.
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