AUD News: Australian Dollar Weekly Review – 25 May 2020

The Australian Dollar suffered over the past week as US-China relations soured once again, with US President Donald Trump criticising Beijing’s handling of the coronavirus pandemic. In the first half of the week, the ‘Aussie’ performed well with risk-sentiment rising on optimism over Europe’s easing of its lockdown measures and the reopening of its economies. 

Meanwhile, Wednesday saw the release of Australia’s Commonwealth Bank manufacturing PMI for May, which fell to a lower-than-expected 42.8. This left many AUD investors concerned about Australia’s economic recovery going forward. Gareth Aird, the head of Australian Economics at CBA, commented: ‘Another incredibly weak result that indicates the contraction in activity observed in April intensified over May. Two consecutive reads in the 20s is simply astonishing as well as concerning.’ 

However, the ‘Aussie’ did manage to hold onto some of its ground after the Governor of the Reserve Bank of Australia (RBA), Philip Lowe, ruled out negative interest rates, saying it would not benefit the economy.

Australian Dollar (AUD) Weekly Review

AUD/USD trading at: 0.656 – Down a cent on the week’s high 
AUD/GBP trading at: 0.537 – Down almost two cents on the week’s high
AUD/EUR trading at:  0.599 – Down almost a cent on the week’s high
AUD/NZD trading at: 1.0599 – Down one cent on the week’s high
*Rates shown are market rates, not available to the public. Rates are current as at 22 May 2020

What’s happening this week that will likely affect the Australian Dollar

Looking to the week ahead, the Australian Dollar (AUD) is likely to remain on the back foot if US-China tensions continue to escalate.
That being said, further signs of the global economy recovering from the coronavirus outbreak would be AUD-positive.
On the data front there will be a few releases which AUD investors will be paying attention to, including:

• Construction Work Done
• Private Capital Expenditure
• Private Sector Credit

*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.