The Australian dollar continues to have a quiet week. AUD/USD is trading at 0.6804 in the European session, up 0.09% today at the time of writing.
Australian Retail Sales stagnate
Consumer spending in Australia has been weak, which has chilled economic activity. Retail sales for July didn’t provide any relief with a reading of zero, shy of the market estimate of 0.3% and well off the June gain of 0.5%. Consumers continue to feel squeezed by elevated interest rates and the high cost of living. The weak economy and a cooling labor market are making consumers even more cautious about discretionary spending.
Will today’s soft data prod the Reserve Bank of Australia to consider a rate cut? The RBA is frustrated with the slow decline in inflation – Governor Bullock has said that the central bank is unlikely to cut for six months and RBA members have been discussing a possible rate hike at recent meetings. The markets are marching to a different tune and have priced in a rate cut in November with more cuts early next year.
The remaining tier-1 events ahead of the Sept. 24 policy meeting are GDP and the employment report and both releases will be important factors in the rate decision. If these numbers are weaker than supported, it would support the case for a rate cut before year’s end.
The week wraps up with the US Core PCE Price index, considered the Federal Reserve’s preferred inflation indicator. The markets are expecting a small increase in July – from 2.5% to 2.6% y/y and 0.1% to 0.2% m/m. A small move is unlikely to concern the Fed, which has shifted its focus to the weakening labor market now that the battle with inflation is largely over.
AUD/USD technical
AUD/USD is testing resistance at 0.6808. Above, there is resistance at 0.6822.
0.6776 and 0.6754 are providing support.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities.
Opinions are the authors — not necessarily OANDA’s, its officers or directors. OANDA’s Terms of Use and Privacy Policy apply. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Recommended Content
Editors’ Picks
EUR/USD keeps its daily gains below 1.1100 post-US PCE
The slightly bearish tone in the Greenback motivates EUR/USD to maintain its constructive bias on Friday near 1.1090 in the wake of the release of the US inflation data measured by the PCE.
GBP/USD hovers around 1.3180 on US PCE data
GBP/USD maintains the positive stance in the proxiity of 1.3200 the figure amidst the marginal pullback in the US Dollar following the publication of US inflation tracked by the PCE.
Gold extends range despite US PCE inflation data miss
Gold trades mixed on Friday, edging down to trade in the $2,510s after the release of US inflation data in the form of the US Personal Consumption Expenditure (PCE) Index for July. The precious metal started the day mildly weaker after market sentiment turned positive following the release of surprisingly upbeat data from the US.
Week ahead – Investors brace for NFP amid Fed rate cut speculation
Here comes another NFP week, with investors eagerly awaiting the results as they try to discern the size and pace of the Fed’s forthcoming rate cuts. The weaker than expected July numbers triggered market turbulence, instilling fears about a potential recession in the US.
Easing Eurozone inflation to back an ECB rate cut in September Premium
Eurostat will publish the preliminary estimate of the August Eurozone Harmonized Index of Consumer Prices on Friday, and the anticipated outcome will back up the case for another European Central Bank interest rate cut when policymakers meet in September.
Moneta Markets review 2024: All you need to know
VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.