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.
Australian Headlines and Economic data
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.
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.