The Australian dollar finally received some good news today. The currency is higher following better-than-expected monthly retail sales. Looking at the charts, AUD/USD rallied from around 0.760 to 0.7640 following retail sales numbers. The Aussie also enjoyed a small bounce following the RBA's statement. While the RBA did not make any adjustments to its cash rate (1.5%) it omitted references to "inflation is likely to remain low for some time". Looking at yesterday's TD Securities monthly inflation figures, headline inflation accelerated from 2.6% to 2.7%. Our short-term and medium-term outlook remain bearish.
AUD/USD is currently up and trading just above 0.7640. Looking at EUR/AUD, the pair is down and currently just above 1.550. The GBP/AUD is down and the exchange rate is currently above 1.7510.
This is a significant week for economic data relating to the Australian dollar. TD Securities inflation was higher than the previous print (2.7% vs. 2.6% prior). The RBA left cash rates on hold but omitted references to "inflation is likely to remain low for some time". Retail sales beat expectations (0.5% vs. 0.3% expected). On Wednesday we’ll get GDP growth figures. On Thursday we’ll see AiG Performance of Construction Index and trade figures. Lastly on Friday we’ll get home loans and investment lending for homes.