Australian Dollar Strong After Fitch Maintains Credit Rating

The Australian dollar was among the strongest currencies on the Forex market today, rising against all other most-traded currencies except for the New Zealand dollar. That said, the Aussie has lost its gains versus the euro at the time of writing and has been retreating from day’s highs against several others.
Fitch Ratings maintained Australia’s Long-Term Foreign-Currency Issuer Default Rating at ‘AAA’ but with a negative outlook. The rating agency cited the following reasons for its decision:

Australia’s rating reflects its strong institutions and effective policy framework, which supported nearly three decades of economic growth prior to the coronavirus pandemic and helped limit the severity of the current shock. The Negative Outlook reflects uncertainty around the medium-term debt trajectory following the significant rise in public debt/GDP caused by the response to the pandemic.

Fitch estimated that Australia’s gross domestic product contracted by 2.8% in 2020 versus the ‘AAA’ median contraction of 3.8%. As for the coming years, the agency predicted that GDP will expand by 3.8% in 2021 and 2.7% in 2022.
Market analysts attributed today’s good performance of the Australian currency to the positive general market sentiment as well as gains in iron ore and copper prices. Copper has breached the $4 level last week, the highest in about a decade. Furthermore, the industrial metal did not show an intention to stop, rallying more than 1% during Monday’s trading session.
AUD/USD rose from 0.7869 to 0.7898 as of 13:44 GMT today, and its daily high of 0.7908 was the highest since March 2018. EUR/AUD opened at 1.5383, fell to 1.5344 intraday — the lowest since June 2018 — but has rebounded to trade near the opening level later. AUD/NZD slipped from 1.0784 to 1.0779 but has bounced from the session minimum of 1.0764.
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Original from: www.earnforex.com