Aussie advances as retail sales data beat estimate

A mixed bag of Australian data

AUD/USD was given a boost in lackluster trading in Asia after Australia’s retail sales came in stronger than forecast in May. Sales rose 0.4% m/m, the same gain as posted in April, but it was higher than the estimate of a 0.3% increase.

On a more bearish note, the trade surplus unexpectedly narrowed to A$827 million in May, contrasting sharply with expectations of a boost from A$977 million in April to A$1.2 billion.

The retail sales data won the battle, with AUD/USD pushing back above the 0.7400 handle.

AUD/USD Daily Chart

Source: Oanda fxTrade

PBOC’s soothing words appear to work, for the currency

In other markets, the PBOC’s verbal intervention yesterday appeared to steady markets, with the offshore yuan posting modest gains versus the US dollar.  However, Chinese equities struggled to echo such sentiment, and slid for a third straight day. The 6.70 level for the yuan vs dollar would appear to be a near-term line in the sand for the China central bank, given that the pair was trading around that level in August 2017 when the central bank relaxed some restrictions on the yuan. Yesterday’s USD/CNH high of 6.7335 was the highest since August 7, 2017.

USD/CNH Daily Chart

Source: Oanda fxTrade

The Yuan airbrake

Sparse data calendar

It’s July 4th so we can expect activity to slow down as the European session progresses today. Data releases are limited to Markit June services PMI data for Spain, Italy, Germany, France, UK and for the combined Euro-zone.

You can access the full MarketPulse data calendar here:

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Andrew Robinson

Andrew Robinson

Senior Market Analyst at MarketPulse
A seasoned professional with more than 30 years’ experience in foreign exchange, interest rates and commodities, Andrew Robinson is a senior market analyst with OANDA, responsible for providing timely and relevant market commentary and live market analysis throughout the Asia-Pacific region. Having previously worked in Europe, since moving to Singapore he worked with several leading institutions including Bloomberg, Saxo Capital Markets and Informa Global Markets, proving FX strategies based on a combination of technical and fundamental analysis as well as market flow information. Andrew began his career as an FX dealer with NatWest and the Royal Bank of Scotland in the UK.
Andrew Robinson

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