Weekly Roundup: Australian dollar surges higher as market mood improves

The Australian dollar firmed at the start of the week thanks to stronger-than-forecast retail sales data. 

A weaker Chinese manufacturing PMI on Tuesday saw the ‘Aussie’ then slip lower, due to AUD’s status as a proxy currency for China’s economy. 

However, the Australian dollar was able to rally strongly through the remainder of the week. An upbeat market mood boosted the risk-sensitive currency, along with bets on another interest rate hike from the Reserve Bank of Australia (RBA). 

The RBA decision is undoubtedly the focus this week. An expected rate hike would likely see the ‘Aussie’ strengthen, while a disappointing pause from the central bank could lead to an AUD selloff.