Australian Dollar Clobbered By Weak Retail Sales, RBA in Focus
- Australian retail sales were flat on the month in September
- They were unable to match even the modest rise expected
- AUD/USD slipped as evidence of flaccid consumer demand keeps coming
The Australian Dollar fell Friday following the release of disappointing official retail sales figures.
Sales were flat on the month in September, well below the 0.4% rise expected, but above the 0.6% fall seen last time. However Aussie investors chose to accentuate the negative and duly sold the currency down.
This is perhaps unsurprising. The Australian economy’s external, export sector is doing extremely well. More evidence of this was on display just this week with the release of strong export data. However doubts still glower over the domestic economy thanks to peaky consumer demand, anaemic wage-rise levels and eye watering consumer debt. Weaker retail sales speak to the first of these worries, at least. And of course it looks extremely unlikely that record-low Australian interest rates will be rising until local consumers are in better shape.
On its broader daily chart AUD/USD remains clearly stuck in a prominent downtrend from September’s peak. However, it perked up a little this week thanks to some strong Australian economic numbers and seems to be attempting to build a modest base around this week’s lows. However, the Reserve Bank of Australia’s monetary policy decision looms this coming Tuesday. If the central bank seems as reluctant as ever to raise interest rates anytime soon, and as worried as ever about undue Aussie Dollar strength, then that downtrend could quickly be back in train.
--- Written by David Cottle, DailyFX Research
Contact and follow David on Twitter: @DavidCottleFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.