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Mixed performance for the Australian dollar this week, but ultimately finished as a net loser against the major currencies. Global risks sentiment was a major factor in Aussie price action, but it’s likely weaker-than-expected Australian data played a role in its general under performance.

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:

With not catalysts from Australia, it’s likely the volatile session for AUD was mainly driven by global risk sentiment.

First the fall in the Aussie against the majors during the Asia session, was possibly on global risk-off sentiment thanks to rising coronavirus cases headlines (Beijing Locks Down Part of City After Virus Outbreak at Market) and weaker-than-expected Chinese data.

But global risk sentiment shifted back towards positive during the U.S. trading session to likely lift AUD higher after better-than-expected U.S. economic data (Empire State index shows stable conditions in June after two months of record declines) and an announcement from the Federal Reserve that they will start buying individual corporate bonds.

Tuesday:

Sydney, Melbourne house prices up more than 10pc in year before shutdowns

RBA: Slump may be “shallower than expected”

RBA: fiscal and monetary support will be “required for some time”

Australian home prices updates and the RBA minutes didn’t seem to be much of an influence in AUD bias, so the broad drop lower was likely on risk aversion sentiment picking up during the U.S. session. This was likely a reaction to Fed Chair Powell’s testimony that the Fed will not be aggressive with corporate bond buying and that the economy faces “significant uncertainty” on a recovery. 

Wednesday:

Australia’s MI leading index posted 0.2% rebound after previous 1.5% drop

Thursday:

Australia unemployment reaches 19-year high in May after loss of 227,000 jobs

RBA’s Harper Warns Against Cold Turkey on Stimulus, Urges Taper

After the drop in AUD against the majors on the horrible employment update, Aussie bulls strengthened a bit on positive risk sentiment vibes during the London session (possibly on more stimulus coming from the BOE and/or China’s pledge of economic support).

Risk sentiment flipped back to negative during the U.S. session to send the Aussie lower, likely a reaction to weaker-than-expected U.S. unemployment data and rising coronavirus cases headlines.

Friday:

Australian retail sales recover by 16.3% after earlier 17.7% slide

Millions of low-paid workers to benefit from Fair Work decision to boost minimum wage

Friday’s Australian updates seemed to have a positive effect on the Aussie through the London session, but risk sentiment flipped negative during the U.S. session to stall AUD’s comeback. Risk-off sentiment picked up quickly, once again on coronavirus fears, this time off of news that Apple will close some stores again in states that are seeing a resurgence of Covid-19 cases.