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.
- 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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