Australian dollar shrugs off retail sales decline

The Australian dollar is up slightly in the Thursday session. Currently, the pair is trading at 0.7608, up 0.21% on the day. AUD/USD fell to a low of 0.7531 in the Asian session, its lowest level this year.

Australia Retail Sales slip

Australia’s retail sales fell 0.8% in February, but this was an improvement over the preliminary read of -1.1%. The decline is a concern, with the economy in recovery mode from the Covid pandemic. If Retail Sales rebounds in March, all will be forgiven. However, a second straight decline in consumer spending would raise some alarms and could weigh on the Australian dollar.

Will US Nonfarm Payrolls outperform?

The ADP Employment report for February came in at 517 thousand, shy of the estimate of 552 thousand but a huge rise from the previous read of 117 thousand. This marked a six-month high. Although the ADP release is not considered a reliable indicator for the official nonfarm payrolls report on Friday (12:30 GMT), optimism is running high. The street consensus stands at 652 thousand, which would be a sharp rise from the January read of 379 thousand. However, given the impressive US recovery and an aggressive vaccine rollout, NFP could outperform by a wide margin. Barclays Bank sent a note stating it expects to see a gain of 900 thousand new jobs, and some analysts are predicting a gain above the one-million mark. If NFP is unexpectedly strong, we can expect some volatility from AUD/USD on Friday.

The US unemployment rate is expected to drop from 6.2% to 6.0%, while wage growth, which has posted two weak gains of 0.2% in 2021, is expected to edge lower to 0.1%.


AUD/USD Technical

  • AUD/USD faces resistance at 0.7744. Above, there is resistance at 0.7848
  • 0.7550 is the first line of support. It is followed by support at 0.7460

For a look at all of today’s economic events, check out our economic calendar.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher

Kenny Fisher

Market Analyst at OANDA
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

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