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Australia hasn’t been immune to the wide swings in the market lately, largely due to liquidity fears.
Even countries like Australia who have not taken major economy-altering measures to combat the pandemic are seeing significant drops in capital markets.
While fundamentals might be looking up due to the restart of the Chinese economy, the issue of a looming credit crunch is weighing on markets. That’s why Australian jobs numbers are even more important than before.
The fate of the AUD is closely linked with what the RBA does next. Especially since the bank was already paying close attention to the jobs data before the current turmoil anyway!
The logic was that the economy needed to maintain near structural full employment in order to support inflation. Hence, the RBA’s policy is geared towards supporting job growth.
Liquidity is drying up as the markets are plunging due to economic uncertainty. Meanwhile, the RBA has been pumping cash into the market, bu...
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