AUD/USD drops 20 pips on weaker-than-expected Aussie data
|- AUD/USD is flashing red, having hit a session low of 0.6833 soon before press time.
- Australia's retail sales for November came in well below forecasts and trade surplus narrowed more than expected.
- The data may bolster dovish RBA expectations, keeping the AUD under pressure.
The Australian dollar is being offered in response to the weaker-than-expected Aussie retail sales and trade balance numbers released at 00:30 GMT.
The growth in consumer spending, as represented by retail sales, stalled in November, missing the expected increase of 0.3% following October's 0.2% rise.
Meanwhile, the trade surplus, the gap between exports and imports, fell to A$ 4,502 million. The surplus was forecasted to drop to A$ 6,100 million from October's A$ 7,180 million.
The dismal data is likely to bolster the bets of additional easing by the Reserve Bank of Australia (RBA) in 2020. At press time, the central bank is to cut rates by 25 basis points to a new record low of 0.5% in February. Meanwhile, many Australian fund managers have already started preparing for unconventional policies like quantitative easing.
As a result, the AUD/USD pair is likely to remain under pressure during the day ahead. The pair has already dropped by 20 pips to hit a session low of 0.6833 in the last ten minutes.
AUD/USD created a classic Doji candle with a long lower shadow on Wednesday, as the below-forecast US data helped the pair recover early losses. The Institute for Supply Management (ISM) non-manufacturing activity index fell to 53.9 in November, down from 54.7, the data released on Wednesday showed. Notably, Manufacturing activity contracted for the fourth month in a row with new orders down to their lowest level since 2012. Meanwhile, the ADP National Employment data showed an increase of just 67,000 jobs, which was only about half the number expected.
Technical levels
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