Forex: Aussie sees demand after upbeat retail sales (Barcelona) - Aussie is challenging higher levels after benefiting from better-than-expected retail sales data, which jumped by 0.5% in July against estimates of 0.3%. Adding to the improved mood to buy the Aussie was capital expenditure, also rising at a higher-than-thought pace of 4.9% vs 4% expected.

AUD/USD staged a recovery from 1.0660 low, touching a new session high of 1.0713 after a decisive 50 pip spike. The double top formed yesterday at 1.0721/22 is next resistance for the Aussie. AUD/NZD has alos been prompted by buying interest, taking the pair to new highs around 1.2570. EUR/AUD has returned to opening levels at 1.3410.

“The stronger retail number will likely ease concerns the non-mining sectors of the Australian economy are weakening at a pace that will force the RBA to ease rates at some stage” said John Noonan, currency analyst at IFR Markets.