The Australian Dollar is the 5th most actively-traded currency. It is often paired with Asian currencies such as the Yen in a "carry trade" where investors buy the currency with the higher interest rate and sell another currency with a lower rate. Recently, the Australian Dollar made a breakout from previous lows. Chinese purchasters manufacturing index data showed the Chinese economy continued to revoer well from the ravages of coronavirus, even if not quite as well as expected on all counts. The Australian Dollar's slide was arrested by the good Chinese PMI data. China is a major trading partner with Australia. The Chinese April PMI was at 50.8, below the 52 seen in March and the 51.0 expected. But it was above 50, which satisfied the market. Anything above 50 signifies expansion. Trump's comments about punishing China for the pandemic made little sense but did a lot of harm by placing presure on the Yuan. China has fueled Australia's mining and energy expansion.

As many countries tiptoe out of coronavirus restrictions, this is favorable for the Aussie. U.S. Federal Reserve rates will remain at 0 to 0.25 until the economy is clear of pandemic impacts according to a FOMC statement. There was pressure from some sources including the Administration to go to negative interest rates which the Fed will not do. The Fed balance sheet shows taking on a lot of quantitative easing buying of securities. This is not necessarily good for the U.S. Dollar in the exchange rate.

Economic activity in the U.S. declined 4.8% in the First Quarter and is expected to decline worse in the 2nd, impacting the exchange rate.

The Australian Dollar has advanced more than 18.6% over yearly lows. It appears to be approaching resistance.

The coronavirus is not the only cause of a weakened Australian Dollar. The Reserve Bank of Australia cut interest rates to a historic low of 0.75% for the Australian Dollar. RBA Chairman Philip Lowe suggested even more interest rate cuts may be needed.

Many "expertes" expect the AUD to USD forecast rate will reach 0/ 700 by the end of 2020.

Inflation rose above expectations in Australia recently helping the Aussie even though prospects of higher interest rates remains a distant one. The Consu9mer Price Index there rose 0.3% on the quarter and 2.2% on the year. This was well ahead of expectations which had looked for a 1.9% rise. Core inlfation came in at 1.8% on the year ahead of 1.6% expected. The coronavirus has cut a direct link between inflation data and interest rate policyi across the world including Australia. It seems unlikely that interest rates will rise anywhere soon with the RBA seen as possibly taking theirs toi zero.

Australian Prime Minister Scott Morrison gave the Aussie a little boost by saying that the easing oif lockdown restrictions may not be too far away. Recent Aussie lows were of course inspired by the coronavirus. The Austraian Dollar found support in the massive global stimulus preograms designed to ameliorate the worst economic effects of the contagion. Gradual emergence from lockdown in other nations as well as its own have helped the AUD/USD.

National Australia Bank's Alan Oster said Australia faces a recession unlike anything it has seen since World War II. Still, both the Australian and New Zealand Dollars have extended a remarkable comeback, with New Zealand lagging Australia. The moves occurred despite a flood of bond offerings, with the Australian Government selling A$3billion in notes in one recent day alone. All auctions drew solid bids. Three year yields on RBA bonds drew 0.28% interest. Yields on the 10-year drew 0.97%. New Zealand plans to issue NX%90 billion in bonds by 2024. Central banks are keeping the market liquid by buying some of the bonds.

Recently, another pledge of unlimited easing has caused the U.S. Dollar to falter.