The Australian Dollar surged towards 80c yesterday after the governments Josh Frydenberg announced they were remaining “all in” to get people back to work:
1 – Until unemployment falls below 5.25-5.5% the government will not be focusing on stabilising debt i.e. they will keep stimulating the economy or put another way, spending.
2 – This coincides with the RBA who described unemployment as a national priority when justifying their current massive financial support.
Even as the economy improves faster than anyone dared to hope the government still believes this will be 4-year journey implying equities will enjoy a strong tailwind for years to come, this by definition is good for the $A.
MM remains bullish the $A with an initial target above 80c.
