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.
Australian Headlines and Economic data
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.
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.
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.
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’).