AUD/USD drops below 0.72 on dismal Aussie retail sales and international trade data

The AUD/USD pair is feeling the pull of gravity, courtesy of the dismal Aussie data.

The seasonally adjusted retail sales fell 0.4 percent in December, missing the estimated 0.1 percent drop following a 0.4 percent rise in November.  

Meanwhile, trade surplus widened to AUD 3,681 million, beating the forecasted rise to AUD 2,300 million from the November figure of AUD 1,925 million. The uptick in surplus, however, is largely driven by a 6 percent drop in imports.

A contraction in both the retail sales and imports indicates anemic domestic demand. Put simply, the Australian economy could see a deeper slowdown in the near future as consumption is unlikely to compensate for the weakness in the international trade, as represented by the 2 percent drop in exports. 

As a result, the AUD is likely to remain offered ahead of the Reserve Bank of Australia (RBA) rate decision, scheduled for 03:30 GMT. The central bank is widely expected to keep rates unchanged at the record low of 1.5 percent.

As of writing, the AUD/USD pair is trading at the session low of 0.7195 - down more than 15 pips post-Aussie data release.

AUD/USD Technical Levels