The Australian dollar has historically acted as a buffer for the economy in times of global uncertainty. This was very much the case during the GFC for instance and it appears to be part of the RBA’s playbook now, in the opinion of economists at Westpac Institutional Bank. Key quotes “In the Feb SoMP, the RBA noted that the A$ ‘is also likely to depreciate in a more severe [virus]scenario , which would provide some offsetting support to the domestic economy’.” “Courtesy of the fact that market pricing for the Fed has moved so materially and that commodity prices, or at least the commodity prices that Australia specialises in exporting, have been remarkably stable, our measure of fair value has risen. Indeed, as of Friday last week, it had risen to 0.6720, the highest level in two months.” “Now we argue that iron ore prices will succumb to the gravity that absolute record high levels for steel inventory in China and the likelihood that iron ore port inventory rises in the weeks ahead implies. Thus we tend to see the A$ remaining capped by 0.6650.” “However, with a falling US$ and money markets pricing in another aggressive Fed cut March 18, it probably pays to consider the risks from the short term upside that our fair value framework implies.” FX Street FX Street FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions. View All Post By FX Street FXStreet News share Read Next EUR/USD cuts some losses, still below 1.1400 ahead of data FX Street 3 years The Australian dollar has historically acted as a buffer for the economy in times of global uncertainty. This was very much the case during the GFC for instance and it appears to be part of the RBA's playbook now, in the opinion of economists at Westpac Institutional Bank. Key quotes “In the Feb SoMP, the RBA noted that the A$ ‘is also likely to depreciate in a more severe [virus] scenario , which would provide some offsetting support to the domestic economy’.” “Courtesy of the fact that market pricing for the Fed has moved so materially and that commodity prices,… Regulated Forex Brokers All Brokers Sponsored Brokers Broker Benefits Min Deposit Score Visit Broker 1 $100T&Cs Apply 0% Commission and No stamp DutyRegulated by US,UK & International StockCopy Successfull Traders 9.8 Visit Site FreeBets Reviews$100Your capital is at risk. 2 T&Cs Apply 9.8 Visit Site FreeBets Reviews$100Your capital is at risk. 3 Recommended Broker $100T&Cs Apply No deposit or withdrawal feesTrade major forex pairs such as EUR/USD with leverage up to 30:1 and tight spreads of 0.9 pips Low $100 minimum deposit to open a trading account 9 Visit Site FreeBets ReviewsYour capital is at risk. 4 T&Cs Apply Visit Site FreeBets ReviewsYour capital is at risk. 5 Recommended Broker $0T&Cs Apply Trade gold, silver, and platinum directly against major currenciesUp to 1:500 leverage for forex trading24/5 customer service by phone and email 9 Visit Site FreeBets ReviewsYour capital is at risk.