Retail sales fail to rebound
German retail sales failed to match expectations of a 0.5% rebound on a month-by-month basis in May and instead declined for the third month in a row. Sales fell 0.6% m/m, below forecasts of a 0.5% rebound but were still better than April’s 2.0% drop. EUR/USD slid to the lowest level since June 20 but has since rebounded to 1.1291.
RBA cuts as expected
The Reserve Bank of Australia cut its benchmark rate by 25bps for the second consecutive meeting today, confirming expectations of the majority of analysts. The central bank stated that the moved was intended to reduce unemployment and promote economic growth, while inflation remains in a benign environment. Having held rates unchanged for more than two years, and often hinting that the next move could be a hike, the RBA has cut rates to record levels for the past two meetings.
AUD/USD fell to an intraday low of 0.6958 in a knee-jerk reaction but failed to make it past yesterday’s 0.6956 low, and a technical rebound ensued. The RBA stated it “will continue to monitor developments in the labour market closely and adjust monetary policy if needed to support sustainable growth in the economy and the achievement of the inflation target over time”. The FX pair is now at 0.6983, marginally higher than pre-decision.
AUD/USD Daily Chart
Central Bank speakers on tap
Hot on the heels of the RBA’s rate cut, Governor Lowe is scheduled to speak at 0930GMT and is quickly followed by the Fed’s Williams at 1035GMT. On the data front, most releases are second tier, with the US Redbook index and Canada’s Markit manufacturing PMI the main events schgeduled. Bank of England’s Carney will round off today’s session.
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