The US dollar continues its winning streak opposite its Australian counterpart as the drop in the pair’s valuation extends today. Traders veer away from the Aussie as a report on the Australian nation’s retail sales fell unexpectedly. Corporate earnings from the US are perceived to affect the trades of the Greenback today.
Katy Barnato of CNBC reports that the lack of economic data from both sides of the Atlantic is likely to leave major indices feeling directionless during the course of the session. “Corporate earnings in that case are likely to be the main focus for investors searching for catalysts,” Ishaq Siddiqi, a market strategist at ETX Capital said in a morning note.
Earlier today, Australian retail sales was reported to have fallen for a third straight month in December. Data from the Australian Bureau of Statistics showed that consumer spending dipped by 0.2 percent in December to A$21.42 Billion, upsetting forecasts of a 0.3 percent increase. Based on historical figures, this is an extremely rare run of weakness which strengthens the case for a further cut in interest rates. The last time that sales fell for three consecutive months was in late 1999 to early 2000. Further, the annual growth in sales slowed to just 2.3 percent, less than half the pace that used to be considered normal, and came despite rate cuts in both October and December.
Analysts are of the perception that “the RBA is sitting ready to ease,” as per Sue Trinh, a senior currency strategist at Royal Bank of Canada. “Aussie selling pressure stems from the comments that the RBA made that inflation outlook gives scope for further easing.”
The adverse market perception on the Aussie has prospects on the Australian dollar weakening, suggesting a sell bias for the AUDUSD. Still, it would be wise to look out for probable technical corrections on the currency pair.
For more news, analysis, technical charts and candlestick analysis, visit AlgosysFx Forex Trading Solutions.
