AUD/USD ignores weak Aussie retail sales data, trades near 0.7440

The bearish US dollar sentiment helps the AUD/USD pair shrug off the weaker-than-expected Aussie macro data released soon before press time and consolidate near 0.7440

As represented by Retail Sales, Australia's consumer spending rose 1.4% month-on-month in October, missing the preliminary estimate and the previous month's increase of 1.6%. The data validates the Reserve Bank of Australia's dovish stance. The central bank said earlier this week that an interest rate hike is at least three years away. 

The data has arrived two days after Australia's third-quarter Gross Domestic Product showed consumption rose by most in at least 60 years, pushing the growth rate to 3.3% quarter-on-quarter. 

So far, the Aussie dollar hasn't moved on the Retail Sales data and is up 0.8% on a week-to-date basis. 

The weekly gain is the result of the broad-based US dollar sell-off. The greenback is being offered on expectations for swift global economic recovery on potential coronavirus vaccines and renewed fiscal stimulus hopes. The US Senate Democrats are taking additional steps to move the stimulus ball forward, leading to a steepening of the Treasury yield curve. The spread between the 10- and two-year yields is now widest in three years. 

Analysts at Morgan Stanley expect another 10% decline in the dollar over the next 12 months. As such, the path of least resistance for AUD/USD looks to be on the higher side. 

Technical levels