AUD News: Australian Dollar Weekly Review - 4 December 2020

The Australian Dollar initially got off to a poor start this week, tumbling in response to an escalation of tensions between Australia and China, as Canberra called for Beijing to apologise for sharing a fake image alluding to Australian war crimes in Afghanistan.

But it didn’t take long for the AUD to begin its recovery, rising on the back of some positive Chinese economic data.

AUD investors also cheered the publication of Australia's latest GDP figures in midweek as domestic growth was shown to have expanded at a faster-than-expected pace in the third quarter.

However, the bulk of the Australian Dollar’s gains came in the second half of the week, with the risk-sensitive currency surging after the UK approved the Pfizer coronavirus vaccine and the US prepared to pass a new stimulus package.

Looking ahead, we expect the Australian Dollar to remain buoyant through next week’s session so long as the market mood remains broadly positive.

In terms of data there will be a few domestic releases of note to AUD investors, including:

• Business Confidence (Nov)
• Consumer Confidence (Dec)
• RBA Bulletin

Of these, the priority will be on the latest confidence figures, with the AUD potentially strengthening if Australia’s successful fight against the coronavirus helps to bolster business and consumer sentiment.

In overseas markets, the spotlight is likely to be on Brexit, uncertainty over which could infuse considerable volatility into the Pound. For EUR investors the focus will be on the European Central Bank’s (ECB) policy meeting, amidst expectations the bank will expand its quantitative easing programme, whilst USD investors will look to the latest US inflation figures.

*Forecasts provided by TorFX TorFX Pty Ltd. AFS Licence number 246838. The information on this website has been provided for general information purposes only and must not in any way be construed or relied upon as personal advice.