News & Analysis
Aussie’s solid week torn after retail sales shock.
Key points from today’s release:
▸ Retail turnover dropped 0.6pc in August
▸ Among the biggest falls was 1.8 per cent decline in cafe and restaurant turnover
▸ Sales fell in every state and territory across the country
The AUD was on track to post first positive week since September after buyers put in a low on Tuesday. We saw a 78 pip rally from Tuesday lows, with price closing at .7860 overnight – levels not seen since September.
Enter August’s retail sales data, the market expected a figure of 0.3% after September’s flat release. In total shock to the market, August’s data came in at -0.6% – the biggest fall in about four and half years, back down to 2013 levels.
This brings up the RBA and the figures show inflation should be well under control, and rates to remain on hold to a possible cut if data continues to disappoint. Next Australian CPI data will be released on the 25th of October and rates issue might be a key factor in the AUD falls today, as the ASX200 shrugged off the news and has added 10 points. Keep in mind today’s trade balance came in better than expected and has helped to support the local course.
The AUDUSD lost 30 pips to its low post release, eclipsing yesterday’s gains and bringing the week’s gains to neutral as price currently sits just above Tuesday’s .7834 close.
Below is a snapshot of AUDUSD‘s reaction to today’s retail sales data.