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After a choppy start to the week, the Aussie was able to see gains mid-week on positive broad risk sentiment. But it’s looks the disappointing update in Australian retail sales was the culprit in sending it lower on Friday to close as a net loser into the weekend.

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: 

Net move lower to start the week for AUD, and with no catalysts from Australia, it might have been influenced by broad risk sentiment. It’s arguable that the news of President Joe Biden planning to cancel the Keystone XL pipeline project was enough to put traders in a sour mood with no other news headlines to drive the markets in the early week. 

Tuesday:

The Australian dollar rallied during the early Asia session. There were no apparent catalysts for the move, so it was likely influenced by broad risk sentiment. The tone of the market seemed to have leaned positive for the session, possibly in anticipation of upcoming comments from the new Secretary of Treasury (and former Fed head) Janet Yellen and strong odds of commentary that more stimulus is one the way.

Wednesday:

Westpac consumer confidence reveals border restrictions denting economic outlook – “The latest Westpac-Melbourne Institute consumer sentiment index fell 4.5 per cent to a position of 107 in January from 112 in the previous month, largely highlighting the impact domestic border closures have had on consumer confidence.”

Despite the disappointing consumer confidence data, the Aussie moved broadly higher on the session.

Thursday:

Australian MI inflation expectations index dipped from 3.5% to 3.4%

Australian employment up by 50K as expected in December; Unemployment falls to 6.6% as the recovery strengthens – “Australia’s recovery is bolstered by the authorities’ ability to contain the virus — even accounting for recent isolated outbreaks — boosting confidence and encouraging cashed-up households to spend. That’s prompted firms to resume hiring and Australians to return to the labor force, tempering the impact on unemployment as participation swells.”

Friday:

Australia manufacturing PMI jumps in January – Markit:

“The manufacturing sector in Australia continued to expand in January, and at a faster rate, Markit Economics said in Friday’s flash estimate with a PMI score of 57.2.

That’s up from 55.7 in December and it moves further above the boom-or-bust line of 50 that separates expansion from contraction.”

Australia shoppers pull back in December – “The 4.2% month-on-month drop in sales was spread across five of the six retail categories, led by household goods, department stores and clothing, the Australian Bureau of Statistics (ABS) reported on Friday.”