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The Australian dollar took a beating on Tuesday after the latest monetary policy statement from the Reserve Bank of Australia and Australian government budget report.

But the bulls were able to recover through the rest of the week, likely due to global risk sentiment increasingly more positive as the U.S. gets closer to a new stimulus deal.

Overlay of AUD Pairs: 1-Hour Forex Chart
Overlay of AUD Pairs: 1-Hour Forex Chart
AUD Weekly Performance from MarketMilk
AUD Weekly Performance from MarketMilk

Australian Headlines and Economic data

Monday:

The Melbourne Institute inflation gauge rose by 0.1% in September to an annual growth rate of 1.3%

NAB Business Confidence for September: +6 to 0 index points

Australian construction activity outside Victoria improves in September

Australian services activity returns to growth at end of
third quarter

Tuesday:

Australian job advertisements rise 7.8% in September – ANZ

Australia posts smallest trade surplus in nearly 2 years

RBA keeps interest rates on hold as it waits to see the federal government’s cards

Australia weekly consumer confidence: 95.0 vs. 93.5

Australia to run record budget deficit as government cuts tax, boosts job support – “Treasurer Josh Frydenberg on Tuesday announced A$17.8 billion in personal tax cuts and A$5.2 billion in new programmes to boost employment in a recovery plan aimed at creating one million new jobs over the next four years.”

On top of news that the Australian government is likely to run a record budget deficit, pressure on the Aussie likely also came from broad risk aversion sentiment during the U.S. session after U.S. President Donald Trump halted Covid-19 relief aid talks until after election.

Wednesday:

Melbourne lockdown contributes to services decline in August

RBA prints its latest chart pack

We saw the bottom of the week for the Aussie during the Wednesday session, likely on a 180 degree turn on risk sentiment to positive after U.S. President Donald Trump reversed on his call to end work on a stimulus package, calling for Congress to aid the U.S. airline industry.  This lifted risk assets quickly during the morning Asia trading session.

Thursday:

Asian shares at one-month highs on renewed U.S. stimulus hopes

Friday:

Asian shares close in on two and half-year peak as U.S. stimulus hopes return

Australia central bank warns of business failures as property vacancies rise

RBA: Australian banks strong enough to withstand economic shock, support recovery