AUD News: Australian Dollar Weekly Review - 21 Aug

The Australian Dollar initially rallied this week, carried higher by market optimism and broad weakness in the US Dollar.

However, this upside in the ‘Aussie’ was tempered by some dovish minutes from the Reserve Bank of Australia (RBA) as well as renewed tensions between the US and China.

AUD exchange rates subsequently plummeted in the latter half of the week amid a sudden souring of the market mood.

The Federal Reserve triggered this fallout with some dovish minutes which warned that the pandemic has created ‘elevated uncertainty’ over global growth prospects.

This understandably alarmed many investors and saw them shun the risk-sensitive ‘Aussie’.

Looking ahead to next week’s session, there are few domestic releases of note which could leave AUD exchange rates particularly vulnerable to market sentiment.

As such, the direction of the Australian Dollar is likely to remain closely tied to the global growth outlook.

A further souring of sentiment could weigh on the ‘Aussie’ whereas any positive headlines pertaining to a potential coronavirus vaccine could allow for some upside.

In international trade, the publication of the latest US GDP estimate could drive volatility in the US Dollar next week if second quarter growth is revised in any way.

For EUR investors, the focus will be on the Eurozone’s latest economic sentiment index, while a speech by Bank of England (BoE) Governor Andrew Bailey could influence the Pound.