AUD/USD: Muted response to below-forecast Aussie Retail Sales
|
- AUD/USD remains sidelined near 0.7135 after Aussie data.
- Australia's retail sales growth slowed sharply in June.
- Broad-based US dollar losses and rally in gold help the AUD stay resilient.
AUD/USD is barely moving in response to the weaker-than-expected Aussie data released at 01:30 GMT. The currency remains sidelined above 0.7135, having rallied by 1.59% on Tuesday.
The pair’s resilience could be associated with the American dollar’s broad-based weakness and the rally in gold, one of Australia’s key exports.
Retail sales miss expectations
Consumer spending, as represented by Retail Sales, rose 2.4% month-on-month in June, having risen by 16.9% in May. Markets were expecting a rise of 7.1% in June.
The sharp slowdown in Retail Sales growth is not necessarily bad news. This is because the big spike seen in May was largely a result of “revenge spending” following the easing of coronavirus-induced lockdown restrictions.
In any case, the focus at the moment is on the broad-based US dollar weakness. The greenback has taken a beating so far this week due to optimism stemming from progress in coronavirus vaccines and the European Union’s landmark fiscal deal. In addition, hopes for additional US fiscal stimulus seem to be weighing on the safe-haven US dollar.
What’s more, the rally in gold is showing no signs of slowing down and could be helping the AUD consolidate on Tuesday’s massive gain. The yellow metal is currently trading at $1,857, representing over 20% gains on a year-to-date basis, having reached a fresh nine-year high of $1,866 soon before press time.
While the odds appear stacked in favor of the Aussie bulls, further gains may remain elusive if the number of coronavirus cases in Australia and the US continues to rise.
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.