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The Australian dollar takes the top spot this week as traders focused more on the improving economic updates over the pandemic worsening in Australia.

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:

AIG Australia PMI for July 2020: 53.5 vs. 51.5 in June

The Melbourne Institute’s headline inflation gauge rose by a record 0.9 per cent in July (biggest lift since September 2002) to be up 1.3 per cent over the year

Australian job advertisements rebound 16.7% in July – ANZ
Commonwealth Bank Australia Manufacturing PMI: 54.0 in July vs. 51.2 in June

Victoria, Australia, In ‘State Of Disaster,’ Melbourne Lockdown From Covid-19 Coronavirus

Broad weakness for the Aussie during the London session despite the early positive AU updates, but traders were able to turn the currency back on the positive path, likely due to rising risk-on sentiment (broad U.S. equity strength (once again lead by the tech sector) and/or positive coronavirus news (Eli Lilly starts late-stage study of coronavirus drug in nursing homes).

Tuesday:

Australian trade surplus widened from 7.34B AUD to 8.20B AUD

Australian retail sales increased by 2.7% vs. 2.4% forecast in June

RBA kept rates unchanged at 0.25% as expected

RBA: Economic recovery underway in most parts of Australia

Wednesday:

Australia’s construction industry slump eases in July 2020

Australia’s services activity recovery gathers pace in July

Australia suffers worst day of Covid pandemic with record deaths and cases

After the Aussie’s Asia session rally (which may have also been supported by positive economic updates from New Zealand and China), the currency weakened during the U.S. trading session, possibly on risk-off vibes sparked by the much weaker-than-expected U.S. jobs read from ADP.

Thursday:

No major catalysts from Australia on Thursday, but we did see a pop higher in the Aussie against the majors on the session, possibly on another round of risk-on sentiment after the better-than-expected U.S. unemployment claims? Or hopes of a new U.S. stimulus deal before the end of the week

Friday:

RBA Statement: Australia’s economic recovery slowed by coronavirus second wave

Australia Services Index: decline in activity for services industries subsides in July

On top of the disappointing updates from Australia above to likely sink the Aussie on the session, we saw a round of risk aversion sentiment to likely contribute to the Australian dollar’s move lower. This may have stemmed from rising geopolitical tensions between the U.S. and China, and/or the eventual failure of the U.S. government to come up with a stimulus package before the end of the week.