The Australian Dollar initially rallied this week, carried higher by market optimism and broad weakness in the US Dollar.
However, this upside in the ‘Aussie’ was tempered by some dovish minutes from the Reserve Bank of Australia (RBA) as well as renewed tensions between the US and China.
AUD exchange rates subsequently plummeted in the latter half of the week amid a sudden souring of the market mood.
The Federal Reserve triggered this fallout with some dovish minutes which warned that the pandemic has created ‘elevated uncertainty’ over global growth prospects.
This understandably alarmed many investors and saw them shun the risk-sensitive ‘Aussie’.