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The Reserve Bank of Australia said it has added A$10.7 bln to the banking system through repos. Meanwhile, the markets are pricing over 100% chance of a 25bp cut in the near term, and a terminal rate of 0.15% (RBA cash rate currently at 0.50%).

Earlier, the Australian PM Scott Morrison declared the human biosecurity emergency in the nation and upgraded travel ban to Level 4 across the world, recommending no travel anywhere outside the national boundaries.

FX implications

As far as the Aussie goes, it broke below the 0.60 handle and there is further downside to come should he US dollar continues to pick up a safe haven bid. ” It is very possible that risk appetite will only start recovering when infection and mortality rates from the coronavirus start to peak across the US and Europe. We have revised lower our 3-month AUD/USD forecast to 0.55,” analysts at Rabobank argued.