Australian Dollar Talking Points
AUD/USD trades to a fresh weekly low (0.7255) even though Australia’s Employment report showed an unexpected pickup in job growth, and swings in risk appetite may sway the exchange rate over the remainder of the month as the US Dollar continues to reflect an inverse relationship with investor confidence.
AUD/USD Consolidation Takes Shape Following Test of Monthly High
AUD/USD continues to consolidate after testing the monthly (0.7340) as the Greenback appreciates on the back of waning risk appetite, and the reserve currency may continue to gain ahead of the virtual Group of 20 (G20) Summit as global cases of COVID-19 climb to 56.4 million according to the recent update provided by John Hopkins University.
Source: John Hopkins University
The recent surge in daily COVID-19 cases are likely to dominate discussions at the G20 Summit as the increasing number of social restrictions across major cities raises the threat for protracted recovery, and the Reserve Bank of Australia (RBA) may keep the door open to further support the economy as “the Board is prepared to do more if necessary.”
However, the update to Australia’s Employment report may encourage the RBA to move to the sidelines as the economy adds 178.8K jobs in October versus forecasts for a 27.5K contraction, and Governor Philip Lowe and Co. may merely attempt to buy at its last meeting for 2020 as the central bank plans to purchase “$100 billion of government bonds of maturities of around 5 to 10 years over the next six months.”