AUD News: Australian Dollar Weekly Review - 27 November 2020

The Australian Dollar started strongly this week, rallying on the back of positive PMI figures as well as the announcement that another coronavirus vaccine candidate has shown promising results in phase 3 trials.

While the Aussie dollar faced some setbacks overnight on Monday as this optimism quickly faded, Tuesday saw AUD exchange rates rally once more as market sentiment was bolstered by the news that Donald Trump has finally allowed the formal transition of power to president-elect Joe Biden to begin.

However, the Australian Dollar started to relinquish these gains again almost as quickly as it had made them, trending lower in mid-week trade after disappointing domestic data prompted some profit taking.

AUD exchange rates then strengthened again in the second half of the week, with the currency finding some gains amidst broad weakness in the US Dollar.

Looking ahead to next week’s session, it's likely the Australian Dollar will remain highly sensitive to market sentiment, with any additional vaccine optimism potentially helping to underpin recent AUD gains.

On the data front, there will be a few releases of note to AUD investors, including:

• GDP (Q3)
• Trade Balance (Oct)
• Retail sales (Oct)

Of these the focus will undoubtedly be on Australia’s third quarter GDP release, which could provide the Aussie dollar a boost in mid-week trade if the rebound in growth beats estimates.

In international trade, it seems safe to assume that Brexit will remain a key catalyst for the Pound, while the release of the Eurozone’s inflation figures could drag on the Euro if the bloc remained in a state of deflation this month. Closing out the week will be the publication of the latest US payroll numbers, where a slowing of new jobs added in November may drag on the US dollar.

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