The Australian dollar is down against the US dollar on Tuesday.
The unprecedented turn of events across oil markets over the past 48-hours has crossed over into other commodity markets like copper, a big export product from Australia.
The dollar was sought out as a haven asset, while the prospect of a bailout for the US oil industry and the Senate on course to pass another virus relief bill added to its allure.
AUD/USD was lower by 48 pips (-0.76%) to 0.6287 as of 6pm GMT.
The currency pair fell from an overnight peak just shy of 0.64 to below 0.63. The exchange rate dropped -0.45% on Monday, adding up to a decline of -1.25% this week.
Australian dollar gains as Lowe predicts biggest contraction since 1930s
The drop in oil prices also hurt the price of other commodities exported by Australia. Copper futures fell 4% on Tuesday.
In a speech today RBA Governor Philip Lowe told Australians that “The Next few months are going to be difficult for the Australian economy” Lowe predicted H1 2020 would see the biggest contraction in Australian national output, income since 1930s, falling around 10% with the Australian unemployment rate likely to be around 10% by June.
US dollar gains with Senate set to pass new stimulus
Senate minority leader Chuck Schumer said on Tuesday he believes the Senate will pass virus relief bill today. That bill will add $300 billion to the PPP grant program for small businesses.
Another bailout could well be on the way in the United States after US President Trump tweeted on Tuesday that “We will never let the great U.S. Oil & Gas Industry down. I have instructed the Secretary of Energy and Secretary of the Treasury to formulate a plan which will make funds available so that these very important companies and jobs will be secured long into the future!”
The dollar is holding up despite some more very disappointing economic data. Today the Philadelphia Fed nonmanufacturing business index -96.4 in April versus -35.1 in March
