International

Countries like Australia, New Zealand and South Korea are among the few which managed to buck the trend and put a lid on the coronavirus outbreak, at least for now. Their success has boosted investor confidence and it’s showing in the strength of their currencies.
     With their economies re-opening again, their currencies have significantly jumped from earlier this year when the outbreak ravaged the Asia Pacific region. In contrast, many of their neighbors in the region are still struggling to control the pandemic.
     “New Zealand and Australia have been very effective in controlling COVID-19 and are ready to restart their economies,” Kathy Lien, managing director of foreign exchange strategy at BK Asset Management, wrote in a note last Friday.
     “In Australia, AUD (the Australian dollar) soared despite weaker PMIs after Prime Minister Morrison said they are headed for a COVID safe economy,” she said. Purchasing Managers’ Index (PMI) is an economic indicator of how well the manufacturing sector is performing.
     “The fact that these countries are ready to restart activity after effectively controlling COVID-19 (and not before) means that they are leaps and bounds ahead of the US in terms of economic recovery, which should be wildly positive for their currencies,” Lien said.