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The positive global risk sentiment train remains unstoppable this week, and with a little help from better-than-expected Australia data, the Aussie was nearly unbeatable as well, falling slightly to its close trading partner in the Kiwi.

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:

Australia Performance of Manufacturing index was up 5.8 points in May to 41.6

On top of the positive manufacturing index data, the Aussie’s move higher was likely on traders continuing to focus on the “reopening trade” and better-than-expected Chinese manufacturing PMI data, rather than the continued U.S.-China tensions (China cuts US ag purchases) &  mass U.S. protests over the weekend.

Tuesday:

Data surprises mean Australia’s economy might not have shrunk in first quarter

RBA holds rates steady at 0.25% as expected

Australia’s company profits rose 1.1% in March quarter

The Australia dollar continued its rally on Tuesday, combining the positive Australian data and expectation of no further stimulus from the RBA with rising positive global risk sentiment (“reopening theme” & continued expectations of massive central bank/government stimulus). And it might have gotten a little extra help from news that China bought U.S. soybeans after halt to U.S. purchases ordered, easing U.S.-China tensions a bit for traders.

Wednesday:

Australia reported 0.3% GDP contraction in Q1 vs. projected -0.4% figure

Australian building approvals slumped 1.8% vs. projected 10.8% drop

Commonwealth Bank Australian Services PMI: 26.9 in May vs.19.5 in April

The Aussie pulled back a bit during the Wednesday London session, correlating with the release of European and UK PMI data (improving but still showing severe contraction). Risk-on came back during the US session on a refocus back to the “reopening trade,” covid vaccine developments (US should have a “couple hundred million” doses of a Covid-19 vaccine by start of 2021, Fauci says), and possibly on optimism from the Bank of Canada.

Thursday:

Australian retailers suffer record sales slump, backs grim outlook for Q2 2020 GDP

Australia’s trade surplus eases in April

Australia launches $470 million stimulus package for construction sector

A bump higher in the Aussie during the U.S. trading session, correlating with the latest statement from the European Central Bank that drew positive risk sentiment behavior after ramping up its pandemic bond buying to 1.35T euros.

Friday:

Australia Services Index at 31.6 in May vs. 27.1 in Apr.