Foreign exchange investors are increasingly betting that Australia’s unprecedented bushfires will hurt the country’s economy and some are short-selling the Australian dollar in anticipation it will fall.
On top of a damage bill likely to run to billions, analysts expect that consumer sentiment, retail spending and tourism, which account for more than 3% of the economy, will all take a hit.
That has in turn spurred bets that the crisis could push the Reserve Bank to cut interest rates to support already sluggish growth, which would be negative for the currency since it tends to deter capital inflows.
Read more: https://www.theguardian.com/business/2020/jan/13/investors-bet-on-australian-dollar-falling-as-bushfires-hit-economy
On top of a damage bill likely to run to billions, analysts expect that consumer sentiment, retail spending and tourism, which account for more than 3% of the economy, will all take a hit.
That has in turn spurred bets that the crisis could push the Reserve Bank to cut interest rates to support already sluggish growth, which would be negative for the currency since it tends to deter capital inflows.
Read more: https://www.theguardian.com/business/2020/jan/13/investors-bet-on-australian-dollar-falling-as-bushfires-hit-economy
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