Retail Sales Report Affects Australian Dollar Performance

The Australian currency, which touched the highest level in one years versus its U.S. counterpart yesterday, fell as domestic reports indicated today that the country’s economic health is not as good as perceived by investors, mainly in the sales and real estate sectors.
After the Australian government published a report indicating that home loan approvals declined for the first time since the end of last year, the Aussie declined versus virtually all 16 main traded currencies, mainly versus its New Zealand counterpart as speculations indicate that the Reserve Bank of New Zealand will not cut further its national benchmark interest rate, raising attractiveness for the kiwi currency in the South Pacific and Asian regions. Australian retail sales also declined in August, making traders to be less confident towards interest rate hikes in the country before the end of the year.
The retail sales can be understood by traders as a reason for the Reserve Bank of Australia to postpone any projects of raising interest rates in the country, which is weighing negatively on the Aussie’s outlook. Even if today was rather negative for the Australian dollar, the overall forecast for the Aussie still remains very positive, as the country is proving itself more capable of recovering than most of the other world economic regions.
AUD/USD traded at 0.8595 as of 11:01 GMT after being traded at 0.8661 yesterday. AUD/JPY traded at 79.54 from 79.99.

If you have any questions, comments or opinions regarding the Australian Dollar,
feel free to post them using the commentary form below.

Leave a Reply

Your email address will not be published. Required fields are marked *

seven + 1 =