Aussie slips despite solid Retail Sales

It’s been an up-and-down week for the Australian dollar. AUD/USD is in negative territory on Friday, surrendering most of the gains made on Thursday. In the European session, AUD/USD is trading at 0.7756, down 0.25% on the day.

Australian Retail Sales beats forecast

Retail Sales for March showed a gain of 1.1%, easily beating the forecast of o.5%. This marked the third straight month that Retail Sales has exceeded the 1.0% level, which points to steady growth in consumer spending, a key driver of economic activity.

There was more positive news on Thursday from PMI reports, which pointed to strong growth in the manufacturing and services sectors. The Manufacturing PMI came in at 59.9 and the Services at 58.2, as we continue to see sustained expansion in both sectors. The neutral 50-level separates contraction from expansion.

An increase in global demand for Australian exports has boosted manufacturing, and strong domestic activity has supported businesses and services. Australia has emerged from the Covid pandemic in good shape, and key economic indicators continue to point upwards.

Despite the positive data, the Aussie wasn’t able to take advantage and is in negative territory. The US dollar is having its own problems, as inflation concerns have ease and made the greenback less attractive. The Philly Fed Manufacturing Index fell to 30.1, down sharply from 50.1 beforehand. Investors will be keeping a close eye on Manufacturing PMI, which will be released later on Friday (13:45 GMT). The PMI is expected to show a strong read of 60.0, but if it underperforms, investors could get nervous at a second soft manufacturing release in just two days, and this could sour sentiment towards the US dollar.

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AUD/USD Technical

 

  • There is resistance at 0.7887 and 0.7990
  • On the downside, there are support levels at 0.7684 and 0.7584

For a look at all of today’s economic events, check out our economic calendar. www.marketpulse.com/economic-event

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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 Investing.com, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.