AUD News: Australian Dollar Weekly Review - 9 October 2020

The Australian Dollar has traded in a wide range over the past week as a result of shifting market sentiment.

This initially saw the Aussie accelerate as market risk-appetite was bolstered by the news that Donald Trump had been discharged from hospital after contracting the coronavirus last week.

However, this upbeat mood didn’t last long as Trump torpedoed hopes for a comprehensive US stimulus package with a tweet calling for an immediate halt to talks between the Republicans and Democrats.

While Trump indicated he would be open to targeted spending measures in subsequent tweets, this was not able to fully revive the risk appetite which had propped up AUD demand at the start of the week.

Also weighing on the Aussie this week was the mild tone struck by the Reserve Bank of Australia’s (RBA) latest policy meeting, as well as a smaller-than-expected fiscal stimulus package from the Australian government.

Looking ahead, the Australian Dollar is likely to face additional volatility next week as coronavirus concerns and US election uncertainty are likely to drive markets.

On the data front, the only domestic release of note will be Australia’s latest jobs report.

September’s release could offer some support to the Aussie in the latter half of the week if it shows that domestic unemployment continued to fall.

In broader trade, the spotlight will be on Brexit ahead of a deadline for a UK-EU trade deal, with uncertainty likely to result in some choppy trade in the Pound. At the same time the Eurozone’s latest economic sentiment index could help to shore up the Euro, whilst a risk-off tone may benefit the safe-haven US Dollar.

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