FX Weekly Update 21 Aug 2020

The Week in Review

The AUDUSD reached an 18-month high of 0.7275 on Wednesday, with the market reacting to news of high US unemployment claims to return within the 0.7175-0.7220 range that was seen largely throughout the week. Furthermore, the US Federal Reserve and Reserve Bank of Australia both released their respective July meeting minutes, delivering their overview of the changing economic environment seen throughout July.

AUDUSD Weekly Movement

Pfzier COVID-19 Vaccine

Pfzier Inc. have released additional Phase 1 safety and immunogenicity data regarding their ongoing US based vaccine program (BNT162) against COVID-19. After a successful 11,000 participant stage trial, the vaccine has advanced to its phase 2/3 evolution and if granted clinical success, is on track for regulatory review as early as October 2020. If further testing is successful, the vaccine is planned to supply 100 million doses by the end of 2020 and approximately 1.3 billion by the end of 2021.

Stage 4 lockdowns in Victoria have dramatically decreased case growth throughout the state

Reserve Bank of Australia – Meeting Minutes

The RBA Monetary Policy Meeting Minutes were released on Tuesday, with Governor Philip Lowe and participating members acknowledging the rise and return of COVID-19 cases within several large emerging economies. With the global impact of COVID-19 continuing, members discussed the long-term impact of the pandemic on labour markets and the delayed recovery of the global economy. The RBA expects the impact on domestic labour markets to continue, with the unemployment rate to rise to 10 per cent in late 2020, whilst gradually returning to 7 per cent in 2022.

Furthermore, Phillip Lowe labelled Australia’s economic recovery as hampered due to the recent Victoria COVID-19 outbreak, with Dr Lowe expecting national economic growth to be delayed until the December quarter.

US Federal Reserve – Meeting Minutes

The US Federal Reserve July meeting minutes were released on Thursday with the Fed passing against using yield curve control. Whilst analyst had expected the Fed to utilise yield caps and targets as a monetary policy tool, the Fed have announced they have decided against yield curve control, stating it will only lead to ‘modest benefits’ given the current environment.

In addition, the Federal Reserve have announced they are moving closer towards concluding their policy review, with meeting participants agreeing that a review of the Fed’s policy framework will lead to increased transparency and accountability of the policy.

The Week Ahead

Key events to watch for next week:

  • New Zealand Retail Sales – Monday 8.45am
  • US Preliminary GDP – Thursday 10.30pm
  • Canada GDP – Friday 10.30pm


Abc.net.au. 2020. Who Cares About Credit Ratings During An Economic Crisis? Not The Reserve Bank Governor. [online] Available at: <https://www.abc.net.au/news/2020-08-14/rba-governor-phil-lowe-credit-ratings-not-important-coronavirus/12559044> [Accessed 21 August 2020].

Australian Financial Review. 2020. Daniel Andrews Reports Five-Week New Case Low.


Available at: <https://www.afr.com/politics/federal/experimental-vaccine-to-be-tested-on-60-000-volunteers-20200821-p55nun> [Accessed 21 August 2020].

Board of Governors of the Federal Reserve System. 2020. The Fed – Monetary Policy:. [online] Available at: <https://www.federalreserve.gov/monetarypolicy/fomcminutes20200729.htm> [Accessed 21 August 2020].

Reserve Bank of Australia. 2020. 4 August 2020 | Minutes Of The Monetary Policy Meeting Of The Board. [online] Available at: <https://www.rba.gov.au/monetary-policy/rba-board-minutes/2020/2020-08-04.html> [Accessed 21 August 2020].