Kiwi and Aussie Decline Further on US Retail Sales Report

By TraderVox.com

After declining on March 9 after the US Labor Report showing and increase in employment, the New Zealand and the Australian dollar are set to decline farther, today. This has just come hours before the Retail Sales Report is released later on during the day. The report is expected to show the Retail sales increased by 1.1 percent in the Month of February. The growing US economy is increasing demand for the greenback at the expense of the South Pacific currencies.

The kiwi pared against the Yen after advancing against the Japanese currency for the last three trading days. This happened hours after the largest dairy exporter, Fonterra Cooperative Group Ltd, cut its milk price target. In Australia, a report expected to be released tomorrow showing home loans declined in February is being viewed as indication that Australian economy may not be as good as the US economy. Many investors looking for safe haven assets are going for the US dollar as a result.

The US retail sales report is expected to show a great increase in car sales which has been boosted by the growing credit availability and high employment rate. However, as Bernanke has warned, the US oil prices are expected to push up the inflation and hinder consumer ability to purchase. Analysts in Sydney are indicated that the positive retail sales in US will offer support for the USD while affecting the AUD negatively.

The Australian and New Zealand dollar slid against the yen and the greenback on March 9, and this trend is expected to continue today when the US Commerce Department issues the Retail Sales report. Investors are, however, keeping a close eye on the performance of the Aussie after the report showing that the Australia’s home loans declined in the month of February. Hans Kunnen, an economist in Sydney said that the lower milk prices in New Zealand might not offer much support to the nation’s currency as sentiments towards commodity prices have weakened a notch. Investors will be keeping a close eye on the report from the US to determine whether the USD is the best safe haven currency for today.

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