Australia Trade Balance And Retail Sales Positive, AUD/USD Corrects Lower
THE TAKEAWAY:Australia trade balance beats expectations and retail sales increase MoM > Unlikely to have affected the pair > AUD/USD corrects lower
The Australian Dollar traded lower against the US Dollar as Australian trade and domestic consumption in May showed improvement. Trade balance dramatically improved to A$670m — the highest since December 2011— from a revised A$171M. Furthermore, domestic retail sales increased 0.1% month-over-month compared to a revised -0.1% in April. However, the data is unlikely to have moved the pair. Rather, the pair’s decline seems to be a correction on an earlier intraday surge that found a high at 0.91819.
Economic indicators tied to U.S. outlook could drive the pair lower as investors find direction in risk sentiment. In the coming hours, U.S. employment data at 12:15GMT and service industry data at 14:00GMT are expected to show improvements that could lead investors to unwind more carry trade that favor USD.
At the time of this writing, AUD/USD has fallen to its lowest level since September 2010 after Reserve Bank of Australia Governor Glenn Stevens spoke about the difficulties many sectors of the economy were facing with a high Australian Dollar and the possibility that the currency could move lower.
AUD/USD (5-Minute Chart)
Source: FXCM Marketscope
—Jimmy Yang, DailyFX Research Team
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.