The Australian Dollar[1] was the worst performing major currency[2] last week. AUD price action weakened sharply in response to increasingly dovish[3] rhetoric from the Reserve Bank of Australia. Reports that China has suspended coal imports from their Australian neighbors likely contributed to the move lower by the pro-risk Aussie[4] against top safe-haven currencies[5] like the US Dollar[6] and Japanese Yen[7].
US Dollar turbulence continued with the Greenback getting whipsawed by fiscal stimulus talks and political uncertainty. This theme might linger in the days ahead with investor angst and speculation swirling around potential outcomes for the fast-approaching presidential election[8]. Investor expectations for a comprehensive coronavirus aid package before the November election were down-throttled as President Donald Trump and House Speaker Nancy Pelosi struggle to strike a stimulus deal, which looks due to political gambits.
In turn, the broad-based DXY Index[9] edged higher on balance over the last five trading sessions and now trades flat month-to-date. Meanwhile, anti-fiat gold prices[10] dropped about 1% this past week as the US Dollar strengthened against key FX peers. EUR/USD[11] faced considerable selling pressure with spot prices falling 115-pips, or -1%. The move lower by EUR[12]/USD[13] price action also looks driven partly by deteriorating Eurozone economic prospects. This follows mounting restrictions on business activity aimed at curbing coronavirus second wave risk, which could bring crude oil prices[14] into alignment with trader crosshairs.
Pound[15] Sterling volatility remains heightened in the midst of back-and-forth Brexit negotiations. Recent Brexit developments have highlighted stark differences between the UK and EU
