Aussie dollar falls to a fresh decade low

OFX Daily Market News

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AUD – Australian Dollar

The Australian dollar fell 3.7% overnight against the Greenback reaching a low of 0.6230, its lowest since March 2009, after the coronavirus was declared a pandemic and US equity markets plunged overnight. Prime Minister Scott Morrison is due to deliver details of his governments more than $10 billion stimulus package on Thursday morning. The Australian dollar continues to be hit hardest by the market’s risk-aversion. With the outbreak now being called a pandemic, fears of its impact on the global economy are rising. This is keeping the Australian dollar among the market’s least-appealing major currencies.

Looking ahead today and there are no scheduled releases. From a technical perspective, the AUD/USD pair is currently trading at 0.6230. We continue to expect support to hold on moves approaching 0.6000 while now any upward push will likely meet resistance around 0.7200.

Key Movers

Financial markets are in turmoil, as containment measures to stop the spread of Coronavirus look increasingly likely to send the global economy into a recession and potentially trigger a credit crisis. Trading was suspended again overnight as Wall Street has suffered its worst day since the stock market crashed on Black Monday in 1987. On Thursday, the S&P 500 closed down about 9.5 percent, its biggest daily drop in more than three decades. The decline has left stocks in the US firmly in a bear market — a term that signifies a decline of 20 percent from the most recent highs. European stocks tumbled 8 per cent, even after the European Central Bank pledged to buy more bonds and offer more help for the economy. Many analysts say markets will continue to swing sharply until the number of new infections stops accelerating.

Expected Ranges

AUD/USD: 0.6050 – 0.6450 ▼

GBP/AUD: 1.9900 – 2.0100 ▲

AUD/NZD: 1.0010 – 1.0210 ▼

AUD/EUR: 0.5350 0.5750 ▼

AUD/CAD: 0.8450 – 0.8850 ▼


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The Greenback increases almost 1 percent versus the Euro following U.S. dollar funding stress in money markets. This has not been seen since the 2008 crisis.

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USD – United States Dollar

The Greenback bounces strongly versus G10 currencies, following increased uncertainty over the impact of coronavirus outbreak. Every crisis boosts demand for cash, which is making companies demand U.S dollars, pushing the cost of U.S dollar funding higher (and interest rates in the money markets go higher). As a result, the U.S. dollar is increasing versus other FX pairs, which started at the beginning of this week. According to Bloomberg, as uncertainty grows, the decisive impact of the coronavirus is seen through the corporate treasurers rushing to borrow to bolster their reserves.

Key Movers

The Euro plunged against the U.S. dollar after the ECB kept interest rates unchanged, choosing instead to boost its QE program and add liquidity tools. The EUR/USD pair is trading almost 1 percent lower this morning, trading at 1.1150 at the time of this writing. ECB Head Christine Lagarde said that the virus response must be fiscal, “first and foremost,” adding that the next ECB press conference will be entirely online.

Turbulence has awoken from inactivity in the FX markets, and it started with uncertainty related to the economic effects of the pandemic situation. The worrying issue is that FX markets might revisit levels seen when the global financial crisis crippled markets in 2008.

Expected Ranges

USD/CAD: 1.3727 – 1.3860 ▲

EUR/USD: 1.1079 – 1.1220 ▼

GBP/USD: 1.2579 – 1.2690 ▼

AUD/USD: 0.6232 – 0.6401 ▼

NZD/USD: 0.6115 – 0.6180 ▼


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Aussie holds onto short term support, but for how long?

OFX Daily Market News

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AUD – Australian Dollar

The Australian dollar remained largely range bound through trade on Wednesday, bouncing between support and resistance handles at 0.6480 and 0.6530. Broader moves across currency markets were relatively modest when compared with the whipsawing price swings plaguing equities and stocks. The S&P 500 plunged 6% as investors made another concerted push to safe haven assets, disappointed that the White House and President Trump had failed to expand on Tuesday’s announcement of fiscal stimulus and support. US rates and yields slipped again through trade on Wednesday, helping arrest Tuesdays downward drive and firming short term supports at 0.6460.

With little of note on today’s domestic docket the AUD remains vulnerable and susceptible to broader price moves as volatility across currency markets increases and risk demand drives direction. A detailed fiscal stimulus announcement from the US could help restore confidence across US markets and drive the AUD lower as normal trading fundamentals again steer direction. Watch supports at 0.6460 with a consolidate break opening the door to a deeper downward correction.

Key Movers

The US dollar fell through trade on Tuesday, following plunging equities and stocks lower as markets and investors responded to the White House’s poor response to the broader COVID 19 panic. Having announced fiscal stimulus would be delivered on Tuesday investors were hoping for a more detailed announcement as to what the package entails and where funding will be directed on Wednesday and have so far been left wanting. Broad based sentiment across market analysts suggests the government’s response to date has been lacking and has done little to calm markets and prevent further panic. The dollar fell sharply against the safe haven Yen and Swiss franc down 1% and 0.7% respectively while the dollar index gave up Tuesday’s gains.

The Great British Pound enjoyed mixed fortunes after the Bank of England cut its benchmark interest rate by 50 basis points to 0.25% and the Johnson government issued a 30 billion pound stimulus package aimed as propping up the floundering economy. The coordinated response to the COVID 19 threat from both monetary and fiscal policy control centres lifted the Sterling off one week lows, marking intraday highs at 1.2970 before a consolidate push to haven assets forced a shift back toward 1.28. Cable currently swaps hands at 1.2813

Attentions today turn to the European Central Bank and its monthly policy setting meeting. Investors are anticipating a string of policy changes and QE measures to fight the coronavirus slow down. President Lagarde reportedly spoke with EU leaders through trade on Wednesday, urging a coordinate response from Governments as well as the Central Bank, in a bid to ensure funding and liquidity remain available. With interest rates already below zero a cut in the benchmark interest rate in unlikely to proffer any real stimulatory response. Instead investors expect the ECB will increase the monthly rate of QE and announce another targeted reduction in lending conditions aimed as SME’s to prompt activity across the broader small business community.

Expected Ranges

AUD/USD: 0.6310 – 0.6620 ▼

AUD/EUR: 0.5680 – 0.5890 ▲

GBP/AUD: 1.9420 – 2.0120 ▼

AUD/NZD: 1.0250 – 1.0480 ▼

AUD/CAD: 0.8820 – 0.9050 ▲


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The Greenback is weakening following inflation data results that do not yet reflect impacts of the coronavirus.

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USD – United States Dollar

Core inflation in February accelerated ahead of coronavirus-related impacts. It rose by 2.4 percent, which was the greatest increase in the last five months and it is also slightly higher than the 2.3 percent anticipated. Core inflation excludes food and energy costs that are usually volatile. It is important to highlight that this data will be the last release before U.S. economic indicators start to reflect the impact of the coronavirus.

The U.S. dollar is falling 0.38, 0.78, 0.38, and 1.01 percent versus the Euro, Kiwi dollar, Aussie dollar, and the Yen this morning. The only major currencies losing against the Greenback are the Loonie and Norwegian Krone, mostly due to weak crude oil.

Treasury Secretary Steven Mnuchin said he is hoping to provide $ 200 billion or more in liquidity by delaying tax payments. Mnuchin added that he isn’t looking for bailouts, but there may be specific industries that are highly impacted by the decline in travel that may receive assistance.

Key Movers

The Pound versus the U.S. dollar is trading within a choppy range, between 1.2832 and 1.2986. It is trying to find direction in another bearish morning for the markets in North America. Following a unanimous vote at the Monetary Policy Committee (MPC), the Bank of England (BOE) made an emergency cut of 50 basis points, from 0.75 percent to 0.25 percent to “contain the virus”. However sophisticated market participants were not surprised because there was a 40 basis points cut already priced in the market, and the Pound had already fallen 2.5 percent since the beginning of the year. The MPC also voted unanimously for the BOE to introduce a new Term Funding scheme with additional incentives for Small and Medium-sized Enterprises, financed by the issuance of central bank reserves. The BOE’s decision comes ahead of the release of the U.K. government budget later today, which is expected to boost spending and mark a coordinated effort by officials to shelter the U.K. economy. Bank of England Governor Mark Carney said the central bank is ready to take more action if necessary to defend the economy against the coronavirus outbreak. Carney also said quantitative easing remains part of the BOE toolkit at a press conference early today.

It is interesting to see how the Pound is trading at 1.2948, an increase of 0.29 percent this morning, as it is definitely being driven by a more than expected fiscal stimulus, which could be the biggest fiscal spending in decades and help the Pound positively. The new Chancellor Rishi Sunak will deliver his first and very anticipated budget in a few minutes. Focus for years has been on balancing the books, but the current spending may well change this.

The Loonie falls against all the majors, except for the Norwegian Krone, which is also impacted by crude oil weakening by around 4 percent this morning. The major currencies performing better than the Loonie are the Japanese Yen, Swiss Franc, Kiwi dollar and Aussie dollar, increasing 1.30, 0.6, 0.90 and 0.47 percent, respectively. The USD/CAD is trading at 1.3758, representing a 0.25 percent increase. Technically speaking, the following key resistance should be at 1.3807 and in the next few weeks, the key resistance might be 1.3969. However, for today, the USD/CAD pair might trade between a range of 1.3683 and 1.3796, provided there are no more surprises or unexpected events in the markets.

Expected Ranges

USD/CAD: 1.3683 – 1.3796 ▲

EUR/USD: 1.1260 – 1.1349 ▼

GBP/USD: 1.2838 – 1.2963 ▼

AUD/USD: 0.6455 – 0.6540 ▲

NZD/USD: 0.6231 – 0.6340 ▲


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Aussie driven lower as US bounce drives shift back to fundamental trading patterns

OFX Daily Market News

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AUD – Australian Dollar

The Australian dollar dipped back below 0.65 US cents through trade on Tuesday, giving up 1.6% and touching intraday lows at 0.6470. With little appetite for risk across the broader market the AUD came under pressure after the White House announced stimulus and fiscal support measures to combat the slowdown driven by the coronavirus. Affirmative policy action helped stage improvements across treasury yields and US rates easing broader market concerns and alleviating the panic that overcame markets through trade on Monday. Having found a modicum of stability through the past 24 hours, corrections in the USD have prompted a shift back toward normal trading patterns, with the AUD now responding to standard fundamentals within the risk off environment. The tip toward global recession and the push to safe haven assets weighed on the AUD through trade on Tuesday and we anticipate risk will remain broadly skewed toward the downside through the weeks ahead.

With little of note on today’s domestic docket attentions remain affixed to the evolving impacts of the coronavirus. While the number of new cases being reported in China each day is falling the global spread, specifically in Italy, Iran and South Korea remains largely out of control, suggesting it will be some time before COVID19 is contained. As we edged nearer a domestic and global recession, we anticipate the AUD will test lows triggered in Monday’s flash crash at 0.6315/0.63.

Key Movers

The US dollar enjoyed strong gains through trade on Tuesday, recouping Monday’s losses as stocks and treasury yields rebounded in response to measures enacted by President Trump to combat the economic downturn foisted on the economy by the COVID19 virus. The Dollar jumped against a basket of major counterparts pushing the Yen, Euro GBP and Swiss Franc lower and the Dollar index back above 96.00.

Having touched 1.1495 the Euro fell back through 1.14 and 1.13 to touch 1.1282 while the dollar moved back above 105 Japanese Yen. Despite the normalization in trading patterns on Tuesday volatility across currency markets has jumped sharply since mid-February and when compared with the moves in equity markets there is ample room for further uncertainty moving forward. Attentions remain squarely affixed to broader risk flows as markets respond to fiscal and monetary policy announcements as the global economy attempts to combat the impacts caused by this unprecedented health pandemic.

Expected Ranges

AUD/USD: 0.6320 – 0.6600 ▼

AUD/EUR: 0.5680 – 0.5790 ▼

GBP/AUD: 1.9450 – 2.0230 ▼

AUD/NZD: 1.0320 – 1.0480 ▼

AUD/CAD: 0.8780 – 0.8980 ▼


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The Greenback is in a “dead cat bounce” mode and Trump announced economic measures.

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USD – United States Dollar

The Greenback’s bounce versus different currencies pushed the EUR/USD, but it was already weakening after Italy went into a nationwide lockdown. President Trump said yesterday that he will seek a payroll tax cut and, “…very substantial relief,” for industries that have been hit by the virus.

According to Bloomberg, the economic package to be unveiled by President Donald Trump will leave out any aid for the travel industry, which has been battered by the coronavirus outbreak, for now. If this is true, it will raise the risk that the plan won’t go far enough to satisfy market participants.

On the release side, U.S. inflation numbers will be released tomorrow for February. The expectation is for 0 percent growth in February and 2.2 percent for the year, lower than the 2.5 percent as of January.

Key Movers

The Aussie dollar weakens on disappointing business confidence data. At the same time, Italy, the fourth biggest economy in Europe, will be the first country globally to attempt a nationwide lockdown aimed at preventing the spread of the coronavirus.

Expected Ranges

USD/CAD: 1.3644 – 1.3807 ▲

EUR/USD: 1.1310 – 1.1383 ▼

GBP/USD: 1.2963 – 1.3019 ▼

AUD/USD: 0.6450 – 0.6555 ▼

NZD/USD: 0.6282 – 0.6330 ▼


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Volatility is back; Australian dollar enjoys tumultuous 24 hours

OFX Daily Market News

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AUD – Australian Dollar

The Australian dollar has enjoyed a roller coaster 24 hours plunging lower through domestic trade on Monday before recouping losses overnight as panicked and befuddled investors attempt to respond to the uncertainties thrust upon the global economy by the spreading COVID 19 virus. Having closed Friday buying near 0.6650 US cents the AUD lost 50 points throughout early morning trade before tumbling to intraday lows at 0.6313 as Asian markets opened and widespread panic prompted a flash crash. Panic enveloped currency markets as retail investors triggered a run on liquidity prompting wild price swings and increased volatility as appetite for risk all but evaporated. Having bottomed out the AUD then began a steady rebound as rattled investors corrected the panicked move. The Australian dollar recouped all losses and touched intraday highs at 0.6681 before edging lower into the daily close and currently buys 0.6659 US cents.

Attentions remain squarely affixed to broader risk trends with increased volatility expected across currency markets through the days and weeks ahead. Watch commentary from Prime Minister Scott Morrison today as he outlines the Governments multi-billion-dollar fiscal stimulus plan, it hopes will stave off recession amid concerns the impacts of the coronavirus could be worse than those of the GFC.

Key Movers

The Yen and Swiss Franc surged higher through trade on Monday, advancing against major counterparts as investors rushed to safe haven assets. Risk appetite all but evaporated, oil prices plunged lower, equities tumbled and bond yields tracked downward as panicked investors price in a heightened probability of a global recession. Having enjoyed a sustained and prolonged period of stability since the GFC, volatility across currency markets has returned with a vengeance throughout the last 72 hours as the uncertainties and vagaries of COVID19 continue to send shockwaves through financial systems. EUR/USD implied volatility shot to a 3-year high allowing the Euro to push back through 1.14 and mark its highest level since January 2019, while USD/JPY slumped to is lowest level since 2016 as one-month volatility touched 11 year highs.

With attentions remain squarely affixed to broader health narrative, risk appetite will continue to govern market direction and haven assets are likely to enjoy a sustained period of support through the weeks ahead.

Expected Ranges

AUD/USD: 0.6460 – 0.6680 ▲

AUD/EUR: 0.5640 – 0.5820 ▼

GBP/AUD: 1.9450 – 2.0150 ▲

AUD/NZD: 1.0320 – 1.0530 ▼

AUD/CAD: 0.8850 – 0.9120 ▲


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Aussie bolstered by broad-based US sell off

OFX Daily Market News

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AUD – Australian Dollar

The Australian dollar edged higher through trade on Friday, benefiting from a broad-based US dollar sell off. Despite an evaporation in demand for risk the AUD extended moves beyond 0.66 testing 0.6650 as markets looked to dump the world’s base currency ahead of an anticipated correction in benchmark monetary policy. US spreads continued to fall, dropping against all major counterparts (outside the CAD) as investors price in a series of interest rate cuts in the months ahead as the Fed attempts to prop up the domestic economy.

With little of note on the domestic macroeconomic docket, direction will again be driven by wider risk flows and the ever-evolving coronavirus epidemic. Volatility across currency markets has been largely subdued to this point, when compared with other financial instruments and we expect this to shift through the days and weeks ahead. EUR/USD volatility spiked on Friday and we are beginning to see larger intraday corrections as markets rush to adjust expectations. While the USD remains under pressure, fear and risk appetite should continue to cap AUD upside with resistance on moves approaching 0.6650 and 0.67 still in play.

Key Movers

Global appetite for risk plunged on Friday as fears the global economy will spiral into recession grow by the day. The spreading coronavirus is driving an urgent flight to haven assets as volatility across financial markets reached levels not seen since the GFC in 2008. With bond yields tumbling, Gold rallied and the JPY and CHF jumped higher while the US dollar fell against most major counterparts. The number of cases reported in the US rose steadily throughout last week prompting markets to price in further Federal Reserve rate cuts. Markets largely ignored a robust labour market print, instead zeroing in on the fiscal response to the coronavirus thus far. Economic advisor Kudlow has promised a “timely and measured” platform of support, a message that disappointed markets chasing more affirmative action. The USD fell through 105 JPY while the Euro drove through 1.13. Volatility in EUR/USD touched 15-month highs having risen sharply through the last 3 weeks, bolstering Euro demand as investors unwind a string of short positions entered through the first 2 months of the year.

The Canadian dollar was the day’s worst performer among majors, tumbling as oil prices bottomed out. Oil dropped 9% to three year lows as talks between OPEC and non-OPEC oil producers broke down before an agreement to cut production could be found.

Attentions remain squarely affixed to developments surrounding the coronavirus as fear and appetite for risk drive direction.

Expected Ranges

AUD/USD: 0.6530 – 0.6670 ▲

AUD/EUR: 0.5780 – 0.5900 ▼

GBP/AUD: 1.9390 – 1.9920 ▲

AUD/NZD: 1.0380 – 1.0520 ▼

AUD/CAD: 0.8850 – 0.9020 ▲


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The Greenback continues to free fall, despite strong employment numbers.

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USD – United States Dollar

The FX market is ignoring strong employment numbers in the U.S., and for now, the U.S. dollar has not erased losses, despite a positive job data surprise, where the February non-farm payroll report came in stronger than the forecast and data for January was revised higher. According to the U.S. Bureau of Labour Statistics, the unemployment rate came in at 3.5 percent, which represents 5.8 million unemployed persons in the U.S. Important job gains occurred in health care and social assistance, food services and drinking places, amongst other areas. The unemployment rate has been either 3.5 percent or 3.6 percent for the past six months. The EUR/USD pair traded higher in the overnight session, reaching an intraday high of 1.1355 (weaker U.S. dollar). It is trading at 1.1340 at the time of this writing, which represents an increase of almost 1 percent for the Euro against the Greenback.

Trump signed a $ 7.8 billion virus bill today after the number of infections in the U.S. topped 200, with 14 deaths, mostly in Washington state. These funds far exceed Trump’s original request of $ 1.25.

Key Movers

Strong data in the U.S. and Canada is not enough for the Greenback and Loonie, which are being overshadowed by concern over the spread of the coronavirus and its impact on economic growth.

The Loonie pared losses against the U.S. dollar. Still, it plunged 1, 1.3, 0.92 and 0.47 percent versus the Yen, Swiss Franc, Euro and British Pound, respectively, in overnight trading, as the spread of the coronavirus continued. This morning, after February Canadian jobs data showed a gain of 30.3k, beating estimates of 11K increase, the Loonie barely erased small losses, but it is all gone, and it keeps falling at the time of this writing.

Canada’s job market strengthened for a third straight month, while wages data beat estimates. According to Statistics Canada, the increase in employment was 0.2 percent in February, but the unemployment rate increased by 0.1 percentage points to 5.6 percent. At the same time, the unemployment rate came in at 5.6 percent, as expected. Statistics Canada also said in its report that while the increases happened in Quebec, Alberta, Nova Scotia and Manitoba, little change was observed in the remaining provinces. Furthermore, there was a small change of employment among the core-aged, and older populations; the increase in employment happened most significantly in the youth population.

Expected Ranges

USD/CAD: 1.3350 – 1.3465 ▲

EUR/USD: 1.1293 – 1.1413 ▲

GBP/USD: 1.2969 – 1.3117 ▲

AUD/USD: 0.6535 – 0.6672 ▲

NZD/USD: 0.6331 – 0.6413 ▲


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Aussie falters in face of risk of trend

OFX Daily Market News

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AUD – Australian Dollar

The Australian dollar fell through trade on Thursday, slipping back below 0.66, touching intraday lows at 0.6587. With little macroeconomic data on hand to drive direction analyst and investors again looked to broader risk trends as the market grapples with estimates surrounding the economic impact of the coronavirus. A wider risk off note permeated the market and the AUD trended lower giving up some of the weeks earlier gains while suffering sharp losses against key haven counterparts in the JPY and CHF.

With little of note on the domestic macroeconomic docket today, attentions remain squarely affixed to headline updates regarding the state of the coronavirus and the global response. With Treasurer Frydenberg hinting yesterday that a stimulus package to boost and support the domestic economy was imminent we turn to Fiscal policy updates as a catalyst to help the AUD track back above 0.66.

With risk demand capping any upturn and we anticipate the AUD will remain largely range bound and struggle on moves approaching 0.6630/50 yet find support on moves toward 0.6580 with deeper supports at recent lows near 0.6460.

Key Movers

The Great British Pound touched one week highs against the USD despite a broader risk off mood. Expectations of an immediate out of cycle Bank of England monetary policy adjustment faltered through trade on Thursday after incoming and newly appointed Governor Andrew Bailey advise lawmakers in Westminster the MPC (monetary Policy Committee) intended to wait until it had more data and clarity surrounding the broader impact of the coronavirus before lowering interest rates. Pushing through 1.2950 sterling touched intraday highs at 1.2966, while edging higher against the Euro. Despite the upturn the Pound remains vulnerable to further downward corrections as markets continue to price in an interest rate adjustment later this month and at least a 50 basis point reduction by year end. As talks been the UK and EU begin to fracture a spreading coronavirus could push Britain into a recession, prompting more drastic monetary policy measures.

Despite the flight to safety and broader risk off overtone the USD edged lower through trade on Thursday as markets priced in additional Federal Reserve interest rate adjustments. Having already cut interest rates by 50 basis points earlier this week money markets began pricing in an additional 25 basis point cut for the fed’s next meeting on March 18 and a possible further 25 basis point cut in April. The dollar tumbled against the Japanese Yen moving toward 5 months lows and falling below 107 to touch 106.70. With non-farm payroll data the headline macroeconomic item on the agenda today, investors will be looking for sustained strength across the labour market as bastion of stability in the face of broader coronavirus uncertainty.

Expected Ranges

AUD/USD: 0.6460 – 0.6630 ▼

AUD/EUR: 0.5830 – 0.5950 ▼

GBP/AUD: 1.9450 – 1.9880 ▲

AUD/NZD: 1.0420 – 1.0525 ▼

AUD/CAD: 0.8810 – 0.8890 ▼


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