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The Australian dollar took the top loser spot this week as global risk sentiment shifted negative, thanks to worsening global outlooks and rising coronavirus fears.

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:

No major catalysts for the Aussie dollar on the session, but we did see a broad move higher during the U.S. trading session, likely on positive risk vibes as traders continued to ride the “reopening” theme.

Tuesday:

Australia’s NAB business confidence index up from -45 to -20

Australian job advertisements picked up by 0.5% after earlier 53.4% slump

Australia revises foreign investment laws for national security

A broad move lower in the Aussie during the London session, possibly off of weaker-than-expected European trade data (e.g., German Exports in April 2020: -31.1% on April 2019) or geopolitical tensions (North Korea cuts communications with South Korea, Pompeo demands Iran release US detainees, urges Libya ceasefire)? But during the U.S. session the turned higher a bit, possibly on rising risk-on sentiment after the WHO’s makes a U-turn on asymptomatic transmission.

Wednesday:

Westpac: AU consumer sentiment back near pre-crisis levels

The Aussie reversed its gains late in the U.S. session, likely on risk-off sentiment sparked by a dovish Fed outlook on the economy. 

Thursday:

Australia’s MI inflation expectations dipped from 3.3% to 3.2%

Aussie weakness continued into the Thursday session off of the FOMC event. Negative global risk sentiment accelerated during the US session, likely on fears of a second wave (Florida Reports Highest Daily Increase in Coronavirus Cases Since Outbreak Began) are added on top of the Fed’s dismal outlook to worry about.

Friday:

Positive global risk sentiment recovers during the Asia and London trading sessions (possibly profit-taking?) to send AUD higher, but swings back to negative later to secure the Aussie’s losses for the week as fears continue to rise of a second wave and a re-implementation of lockdown protocols (CDC warns U.S. may reimplement strict coronavirus measures if cases go up ‘dramatically’).