AUD/USD: Better bid despite weak rebound in Aussie retail sales
|- AUD/USD is keeping gains despite the weaker-than-expected Aussie retail sales data.
- The pair may extend gains on dovish Federal Reserve expectations.
- RBA's Financial Stability Report cites housing market as key risk to economy.
AUD/USD is keeping gains despite the weaker-than-expected Aussie macro data released soon before press time
Consumer spending, as represented by August retail sales, came in at 0.4%, narrowly missing the expected 0.5% rise, having dropped by 0.1% in August, the Australian Bureau of Statistics data released at 01:30 GMT showed.
So far, the weaker-than-expected rebound in retail sales has not had any negative impact on the Aussie dollar. As of writing, the AUD/USD pair is trading around 0.6750 – down just five pips from the session high of 0.6756 seen before the retail sales release.
Aussie’s resilience could be associated with the increased odds of an October Federal Reserve rate cut. As of now, more than 90% of traders are pricing in the chance of a third, 25-basis point rate cut at the Fed’s Oct. 30 meeting, according to the CME’s FedWatch tool. The probability stood at 40% on Monday.
Further, the Reserve Bank of Australia’s Financial Stability Review, released at 01:30 GMT, offered little negative surprises. The report cited housing market, uptick in the jobless rate and the slowdown in the income growth as key risks to Australia’s economy. All these negatives are generally accepted and priced in by now.
Looking ahead, the AUD/USD pair may continue to rise, having charted a bullish Doji reversal pattern on the daily chart earlier this week. Also, the dovish Fed expectations will likely keep the pair better bid.
Technical levels
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.