The Australian dollar has again weakened today, following disappointing retail sales figures yesterday and suggestions that the Reserve Bank of Australia may be looking to cut rates (vs. expectations of future rate hikes). We have reduced our short-term outlook on the currency to bearish accordingly.
AUD/USD is currently trading below 0.7780. Looking at EUR/AUD, the exchange rate is now back above 1.50, and is currently above 1.5040. Finally, the pound has been flat against the Aussie, with the exchange rate below 1.6830.
On Monday, we saw fairly strong manufacturing survey data (54.2) and strong inflation figures as well (2.5% YoY). Tuesday's Reserve Bank of Australia interest rate decision and statement was a non-event, as we covered in our preview. Today, we saw weak retail sales data overshadow strong trade balance numbers given concerns regarding future economic growth.