Australian Treasury: Economy to contract by 7%

The Secretary of the Department of the Treasury, Dr Steven Kennedy, says the Australian economy is expected to fall 7% in Q2 of 2020.

Key notes

• Road to recovery will be long and unpredictable -
• Household saving ratio expected to by 20% in Q2 
• Wll support households over coming quarters.

The statements are nothing new that markets have not already factored in ahead of next weeks Reser Bank of Australia meeting. 

Traders are more inclined to monitor the value of the Aussie.

Governor, Philip Lowe last stated that “you can't at the moment make the case [the Australian dollar] is misaligned” in his speech to the Anika Foundation.

Traders quickly took that signal to mark the AUD sharply higher.

Next week is the RBA, so the value of the currency will be a keen subject to watch out for, especially considering how low the greenback has dropped since Lowe's comments.