Australian Retail Sales unexpectedly dropped in December, slipping -0.7% from the previous month versus expectations of a 0.2% increase to register the first decline in five months. Department store sales led the metric lower, slipping -3.5%, while apparel and food sales lost -1.9% and -1.3% respectively. The figures bode ill for the Australian Dollar, painting a dour picture of the Australian consumer even as stimulus is withdrawn and the self-sufficiency of economic growth is tested. Indeed, December’s surge in Building Approvals seemed to be ignored despite a 2.2% increase amid expectations for a flat result and a sharp upward revision to November’s outcome (10.4% versus 5.4% originally reported). The outcome likely failed to impress as permits for publicly-funded construction grew at an annual pace that was nearly nine times that of the private sector, hinting that most of the gains were had on the back of infrastructure spending allotted in last year’s fiscal package. Investors seem far more concerned with the continuity of the recovery at this point, with today’s figures adding to headwinds facing the high-yielding currency after business confidence floundered and the central bank unexpectedly failed to deliver higher interest rates.
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