The Australian dollar rallied today, though currently, it has trimmed its gains. While the rally happened after a surprisingly positive retail sales report came out, the currency did not rally immediately following the release, therefore it cannot be said with certainty that the report directly contributed to the strength of the Aussie. Whatever the case may be, the Australian currency will have a hard time maintaining gains as the market sentiment remains negative.
The Australian Bureau of Statistics released a preliminary report on retail sales in March. That was a special release aimed to provide more up-to-date information about the impact of the COVID-19 pandemic on the economy. Usually, the report released about five weeks after the month ends. A more precise final report will be released on May 6. The preliminary data revealed that retail sales jumped 8.2% due to the stockpiling demand. The biggest increase was registered in the food retailing industry, though there was also a strong demand for toilet and tissue paper as well as some other products like items related to home offices. That allowed to offset the sharp slump in other industries like restaurant services and clothing retailing.
As for other reports, the six-month annualized growth rate in the WestpacâMelbourne Institute Leading Index, which indicates the expected pace of economic activity in three-to-nine months into the future, dropped from â0.97% in February to â2.47% in March. Westpac Chief Economist Bill Evans commented on the result:
The sharply weaker signal is consistent with a deepening economic impact from the Coronavirus pandemic. The Leading Index growth rate in March is the most negative seen since the Global Financial Crisis.
The Conference Board Leading Economic Index fell by 0.4% in February after increasing by 0.3% in the previous month. The Conference Board Coincident Economic Index rose by 0.1%.
AUD/USD rose from 0.6278 to 0.6321 as of 5:54 GMT today, reaching the high of 0.6352 intraday. EUR/AUD dropped from 1.7284 to 1.7170, and its daily low was at 1.7086. AUD/JPY gained from 67.68 to 68.01 but retreated from the session maximum of 68.46.
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