Market News & Analysis

Australian dollar rallies on retail sales and trade data

Apr 4, 2019 | Market Update

High-impact economic news:

14:35 JPY 30-y Bond Auction
22:30 EUR ECB Monetary Policy Meeting Accounts
01:00 CAD Ivey PMI

The Australian dollar has rocketed backed above 71 US cents, reversing losses suffered after a dovish RBA rate statement, earlier this week. The AUD/USD closed 0.58% higher on Wednesday at 0.7111 and has again extended gains in early trade.

Buyers were encouraged by a spike in retail sales data and the nation’s trade balance. For the month of February, retail sales rose 0.8% vs 0.3% forecast. It’s significantly higher than January’s read of just 0.1% and proves consumers are still spending at the check-out. Australia’s trade balance also hit its highest level on record thanks to rising iron ore prices, coming in at $4.8 billion vs $3.71 billion forecast. This means more Australian goods and services were exported than imported in February; another sign the Australian economy hasn’t tanked.

If strong economic data wasn’t enough, fresh reports have emerged that China and the United States are another step closer to inking a trade deal. Not only did this news help the Aussie, it also saw strength in the Euro. The Euro hit a weekly high against the USD and a near 2-week high against the Japanese Yen, encouraged by a positive Purchasing Managers Index from Germany, France, Italy and Spain. The overall Eurozone Final Services PMI came in at 53.3 vs 52.7 forecast, revealing the services industry is still expanding.

The USD ended mixed against major currencies while equities pushed higher on trade deal enthusiasm. The greenback fell against the Euro, Aussie and Pound Sterling, but climbed to a near 3-week high against the Yen. The USD/CAD ended the session flat at 1.3345. Wall Street stocks closed in the black with the Dow Jones rising 39 points or 0.15% while the S&P 500 closed 6 points or 0.21% higher. The Nasdaq rose 46 points or 0.6% with Amazon and Apple stocks enjoying a positive session. Traders are now turning their attention to tomorrow night’s non-farm payroll figures and unemployment rate.

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