Global equity markets surged to open trading in August, boosted by stronger than expected Manufacturing , in Europe and the USA. The pandemic is experiencing a serious second wave across Europe, Australia and the USA. This has resulted in an extension and increase of lock-down restrictions in Melbourne, Victoria, in an attempt to get the infection rates under control. The restriction will negatively impact Victoria and Australia’s recovery.
Tension between the USA and China continue to rise, with Secretary Pompeo confirming the President will act against data gathering Chinese software companies operating in the USA. The rising tensions between the global super-powers will impact global trade and the existing supply chain. The Dollar found some support, with the EUR drifting back to 1.1750, while the Yen moved back to 106.00.
The coronavirus situation is not helping the Australian economy and the AUD fell back towards 0.7100, while the NZD looks to test 0.6600. The pandemic and the Chinese Geo-Political situations are serious threats to the global economic recovery, but markets continue to benefit the monetary largesse.