The Australian dollar has recorded slight gains in the Thursday session. Currently, the pair is trading at 0.7790, up 0.23% on the day.
Australia retail sales stable
Retail sales climbed 0.5% in January, which followed the December gain of 0.6%. These are by no means earth-shattering numbers, but the two consecutive gains are welcome news after back-to-back declines of around 4 per cent. The small gains point to consumer spending stabilizing and with the recovery gaining steam, we can expect better numbers in the coming months.
It has been a busy week on the fundamental side, with a host of Australian indicators. The highlights have been the RBA policy meeting and a strong GDP report. The RBA left interest rates at the ultra-low level of 0.10%, but the rate statement was notable for its reference to the Australian dollar. The statement noted that the bank’s current monetary policy had contributed “to a lower exchange rate than otherwise. The central bank has watched with apprehension as the Australian dollar has appreciated sharply against the US dollar, with the Aussie punching above the symbolic 80-line just last week. The RBA would like a lower exchange in order to maintain price stability and protect the critical export sector.
GDP showed a strong gain of 3.1% in Q4, down slightly from 3.3% beforehand but well above the estimate of 2.5%. Finance Minister Josh Frydenberg commented that the economy was recovering more quickly than the government had anticipated, noting that the first time in recorded history that Australia has seen two consecutive quarters of economic growth of more than 3%”.
Let’s review the weekly support and resistance levels:
- AUD/USD faces resistance at 0.7910, followed by resistance at 0.8116
- There is weak support at 0.7752, followed closely by support at 0.7728
- AUD/USD is trading around the 0.78 line, which is slightly above its multi-month ascending wedge support at 0.7750
For a look at all of today’s economic events, check out our economic calendar. www.marketpulse.com/economic-events/
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