RBA Debelle: The (FX market) conditions have continued to improve in recent months

Guy Debelle, Deputy Governor at the Reserve Bank of Australia, who is speaking at the Global Foreign Exchange Committee and the FX Global Code – at FX Week Australia 2020, has stated that one notable feature of this latest crisis was both how sharply market conditions deteriorated and how quickly they recovered.

He adds that the actions by central banks and governments around the globe doubtless contributed to this rebound.

By and large, he says that the conditions have continued to improve in recent months. 

''Many indicators of liquidity are now approaching more normal levels, although the depth of market does remain noticeably below pre-pandemic levels.

Conditions are more diverse in emerging market currencies, where more idiosyncratic factors tend to be in play, but overall, conditions have also generally improved in these markets but to a lesser extent.''

There has been no specific reference to the AUD or RBA policy.

The full speech can be read here.

AUD/USD update

AUD/USD climbed to its best levels in a week overnight, 0.7137.

The greenback was under pressure due to the US fiscal headlines, which indicated progress in talks between House Democrats and the White House. 

The dollar got a late-session boost though as equities tanked off and ended in the red as no progress in talks was made towards the signing of an agreement and time is running out. 

AUD/USD is trading at 0.7115 at the time of writing and steady at the start of Asia.