The AUD launched into last week cautiously, given the recent turmoil on the Australian Leadership front. The AUD had seen a drastic plunge following a frantic week of internal wrangling within the ruling Liberal-National coalition, in an attempt to avert a conservative-led move against then Prime Minister, Malcolm Turnbull. Despite narrowly clinging to power after an initial leadership vote, ultimately Turnbull he was ousted from office in a bitter party-room contest that ushered in the country’s sixth leader in the last decade, Scott Morrison. Mr. Morrison has pledged to “heal our party" after the party infighting and on the back of these statements and with the dust settling, the AUD saw a modest recovery to begin the week above 0.7319 versus the USD.
On the data front, the economic calendar was relatively quiet to close out the month of August, however, some key releases put pressure on the AUD. Starting at home, Private Capital Expenditures posted a nasty decline of 2.5% against an expected increase of 0.6%, implying slowing business investment in Australia. Further declines in building approvals with a reading of -5.2% against an expected decline of -2.2% also added fuel to the fire. Earlier in the week, Westpac also reported their mortgage rate increase which didn’t help concerns over the Australian economy either. The market rapidly unwound from its highs of 0.7362 earlier in the week and the AUD closed out the week below the 0.72 mark.