Market Update: 25 November 2020
Equity markets flying on Biden transition, Cabinet picks, vaccine news, and lockdown roll backs.
AUD/USD has reasserted it’s a correlation with global equity markets in recent days, hitting its highest levels since September, the market will now be a keen observer of resistance around 0.7410 in the sessions ahead. This week has seen a wave of market friendly news, with Trump finally accepting of the transition of power, vaccine rolls outs imminent, and COVID cases appearing back under control. The market has warmly welcomed news of the Biden Cabinet, with Janet Yellen’s appointment as Treasury Secretary consider a safe and more importantly predictable pair of hands.
The new US administration is also likely to re-engage with the international community on a range of issues, with John Kerry as Special Envoy for Climate, we think you can expect a rapid readoption of the Paris Accord. Anthony Blinken as Secretary of State views America’s international engagement as vital in ensuring its continued place as the pre-eminent influence in global politics/world order. Thus, in short, the departure from Trump’s “America First” policies will be stark. This all plays well for the AUD in the medium term, considering its place as a “barometer” for world trade we continue to expect a strong performance in 2021.
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