AUD/USD is back to where it was in mid-February
The Australian dollar has now erased all the coronavirus declines and has rebounded to where it was on February 19.
One of the reasons the Australian dollar has been so strong is that it has essentially defeated the virus domestically. Local cases are minuscule and people there rightfully feel safe.
A month ago, I asked: Where would you want to be right now? The answer is in Australia or New Zealand. That’s where money wants to be as well and you can see it flowing in today, despite all the tensions with China.
What next? The March 8 intraday high of 0.6685 is a big level to watch. AUD/USD needs to get above it to truly erase the virus declines. If it can get there then a path to 0.7000 is entirely viable.
As with all risk trades right now, you need to ignore the obvious economic pain of the virus and take a leap of faith into cheap money and deficit spending.