We saw mostly negative economic updates and commentary from Australia this week, but the Australia dollar traded mostly mixed through it all. Counter currency flows and broad risk sentiment were likely drivers for the mixed performance.
Australian Headlines and Economic data
Monday:
RBA Assistant Governor Kent gave a speech that covered the global financial conditions and the RBA’s actions during the initial market panic reaction to the COVID-19 pandemic. Overall, the RBA’s operations to support the economy with low borrowing costs and an ample supply of credit seems to have worked well.
Tuesday:
ANZ: Australia’s consumer confidence dropped 1.7 points this week
Australian employment suffers setback from second virus wave
Wednesday:
Australia announces tighter border restrictions in Queensland
Australian Q2 headline CPI down by 1.9% after earlier 0.3% uptick
Australia’s trimmed mean CPI posted 0.1% dip instead of 0.1% gain
Thursday:
AU June building dwelling approvals slide to eight-year low
Victoria’s COVID lockdown could be extended with Stage Four not ruled out, premier says
Australia Treasury Secretary paints grim picture as economy reels from pandemic
Australia Lowballs Iron Price That Boosts Economy and Budget
Australia Import price index fell -1.9% this quarter; export prices fell -2.4% this quarter
After a negative turn during the Asia session correlating with the terrible Australian updates above, the Aussie dollar bottoms out during the U.S. session and turns a corner heading into the Friday session. This is likely sparked by U.S. dollar weakness and possibly by the U.S. tech sector rally ahead of big tech earnings.
Friday:
Australia’s PPI fell by 1.2% in Q2 after earlier 0.2% uptick
Australian private sector credit sank by 0.2% vs. projected 0.1% dip