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The Reserve Bank of Australia cut its benchmark cash rate to another record low. RBA Governor Philip Lowe pulled the interest rate down to 0.1% to help local businesses. In fact, the central bank also promised to buy 100 billion Australian dollars from banks over the next three months with a quantitative easing program. Not only that – the central bank had also slashed interest rates of banks under a 200 billion AUD program from 0.25% to 0.1%. The drastic actions showed worrying signs that the coronavirus has been taking a heavy toll on its economy. In fact, Lowe said that the region’s economic fall would likely continue for up to three years. Australian policymakers are projected to focus on growing their jobs and wages and even opening up another bond-buying program if necessary. As the new Kiwi economy continues to flourish, its currency’s safe haven status is likely to keep itself up against the Aussie’s.
Brazil is projected to continue its attempt to recover from the coronavirus’ economic contraction into next year. But Economy Minister Paulo Guedes claims that this year’s emergency measures will end on December 31. The emergency aid towards millions of Brazilian families will then expire, even as its unemployment rate remains at a record high of 14.4 percent. The economy is showing no signs of giving in to another quantitative easing bond-buying that would bring down long-term market interest rates. Although this is typically deemed as good news, investors’ worries about its long-term effects will likely be the pair’s bigger factor. However, it’s also important to note that investors are projected to make the most of the recent developments in the eurozone. The bloc is still rendering positivity from its record quarterly gross domestic product growth of 12.7 percent, although end-year results could be lower than pre-pandemic levels.
Help for self-employed British citizens will be nearly doubled in November during the UK’s second coronavirus lockdown. Prime Minister Boris Johnson announced the self-employment income support scheme would be increased from 40 percent to 80 percent throughout the month for people who can apply for the program until the end of the month. The earlier support, which was initially planned for December, is projected to assist the British economy’s recovery despite its conflict with the European Union. The government had also announced an extension to the furlough scheme for employees at weekend hours prior to the recent doubling. This should help Sterling increase against its struggling counterpart, the Brazilian real, which has seen its economy continue to struggle with surging infections. Investors are also projected to keep an eye on Brazil’s determination to end its fiscal support in December despite its high unemployment rate.
Now that another recession is to be expected around the globe, economists are now relatively optimistic about the Russian economy once again. The decline in its gross domestic product’s decline is projected to be lower than in other major economies. According to President Vladimir Putin, the government’s support of small and medium-sized businesses hurt by the coronavirus remains a priority, pointing to a range of support measures by authorities, including tax breaks and grants preferential loans to save jobs, and others. Next year’s deficit will then start by 4.2 percent, although there should be an improvement to be expected by the time 2022 rolls around. Meanwhile, krone investors are more worried about oil price declines within the year. Oil prices have fallen around 14 percent by the end of October – this trend will likely continue as more economies close around the world to suppress demand for oil even further.
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