Mixed performance with a net negative lean for the Aussie this week as coronavirus related headlines likely outweighed risk sentiment and a positive Australian jobs update.
Australia Headlines and Economic data
Monday:
No data from Australia meant a mixed session for the Aussie dollar, with traders battling rising COVID-19 cases news against improving economic data from China.
Tuesday:
ANZ-Roy Morgan Australian Weekly Consumer confidence dips: 86.5 vs. 88.6 previous
NAB Business confidence: AU economic conditions continue to recover, but confidence remains fragile
Borders of Australia’s Northern Territory to remain closed for 18 months
We saw somewhat of a move higher in the Aussie during the Asia and London sessions, likely supported by the improving Australian business confidence data but held back on the lockdown news. The Aussie may have also been supported by positive vaccine headlines (Russia has registered the world’s first coronavirus vaccine, J&J eyes one billion doses of potential COVID-19 shot in 2021) before turning lower during the U.S. session on negative risk sentiment (U.S. stimulus uncertainty, U.S. bankruptcies on track for 10-year high with more than 100 consumer companies already filing)
Wednesday:
Australian Westpac consumer sentiment index down by 9.5% in Aug
Australia’s wage price index up by 0.2% vs. 0.3% consensus in Q2
Australia reports record COVID-19 daily deaths, cases rise
After a fall during the Asia session on disappointing Australian updates, the Aussie was able to bounce back during the U.S. session as risk sentiment improved thanks to improving global data (e.g., Industrial production up by 9.1% in both euro area and EU, U.S. consumer price index rose 0.6% m/m in July) and growing vaccine hopes.
Thursday:
Record prices for zucchini and cucumbers during Australian imports ban
Australia’s job market absorbs Victoria’s virus relapse
Friday:
RBA Governor Lowe says AUD exchange rate needs to be lower, but intervention would not be successful – the recovery in the Aussie against the majors seems to correlate with this event as traders priced in a lower probability of RBA currency intervention operations.