The Australian Dollar began last week relative calm, opening around the 0.7413 mark. This is the fourth consecutive week where the Aussie has exited the weekend around this mark, unable to progress amid the broader narrative of trade tensions that are dominating the headlines.
With US Dollar strength driving market momentum, mid-week saw the Aussie forced lower off the back Federal Reserve Chair Powell decidedly hawkish address in his semi-annual testimony to the Senate. Of note was Chair Powell’s stated intention to continue with the gradual rate rise path “for now”. Against the backdrop of geopolitical tensions and trade disputes the market appreciated the positive take on the health of the US economy and immediately responded.
Towards the end of the week, the big headline was of course the 50.9k jobs added to the Australian economy. The news soundly beat all analyst expectations and saw the Australia Dollar appreciate significantly to 0.7441 mark. However, from there it was a week to forget with the industrial metal prices reflecting slowing growth concerns in China. Copper fell 1.5%, taking its declines since the start of June to 17%. Zinc, Nickel and Lead prices also slid in the decidedly bearish market. Compounding, the commodity concerns was the softness of the Chinese Yuan which hit a new low for the year. Overall, the Aussie fell over 1.5% from its week high at 0.7441.
Thankfully, the Aussie enjoyed a quiet domestic calendar to close out the week; a welcome environment in light of recent trading. Off-shore, risk-events are fairly limited with attention mainly focused on the G20 summit, which kicked off on Friday in Buenos Aires.