Australian dollar plunges lower as uncertainty floods markets

Daily Currency Update

AUD - Australian DollarThe Australian dollar plunged through trade on Thursday as investors' appetite for risk soured, prompting a flight to haven assets. Having touched early morning highs just shy of 0.70 US cents the AUD came under sustained selling pressure throughout the day as investor optimism surrounding the likelihood of a H2 economic rebound faltered, following a sobering assessment of economic conditions from the Federal Reserve. The Fed reiterated its concerns surrounding the Coronavirus and its impact on the broader US economy. The number of cases within the US alone surpassed 2 million on Thursday, evidence the country remains the global epicentre for the disease. With new hot spots appearing across the country, there is a sense the US will be embroiled in a battle against COVID-19 well into 2020 and most likely 2021 as appetite for social distancing and economic lockdown restrictions falter. Equity markets plunged as investors looked to withdraw profits, cashing in on the recent upturn. The S&P 500 fell over 5% while the Eurostoxx 600 fell 4.1% as risk assets and commodity currencies were dumped. The AUD was the worst performer on the day falling 2% and slipping below 0.6850. The question now is, was this merely a short-term correction following the upturn of the last fortnight or the beginnings of a broader shift in risk sentiment. Watch support at 0.6830 and 0.6780 as initial markers on any continued risk-off move.