The Australian dollar continues to have a relatively quiet week. Currently, the pair is trading at 0.7609, up 0.18% on the day.
Australia Retail Sales Next
Australia’s retail sales were a major disappointment in February, as the interim report came in at -1.1%, much worse than the street consensus of +0.6%. The final February release (Thursday 12:30 GMT) is projected to show an identical reading, which would indicate a slump in consumer spending, a key driver of the economy. Earlier on Wednesday, Building Approvals, which tends to show sharp swings, shot up by 21.6% in February, rebounding from a reading of -19.6% a month earlier. This was the strongest one-month gain since 2012.
US yields lifting the US dollar
Just five weeks ago, the Australian dollar was looking down from the heights of the 80-level. However, it has been all US dollar since then, as the Aussie strains to stay above the 76 level. The greenback has shown significant strength in recent weeks, thanks to rising US Treasury yields. On Tuesday, the 10-year yield rose to 1.77%, marking a 14-month high.
With the US economy gathering steam, conditions appear right for further gains by the US dollar. The Biden stimulus package of 1.9 trillion dollars is expected to improve economic conditions, and an aggressive vaccine rollout should bring down Covid-19 numbers in the coming weeks and months.
The dollar could make further gains before the day is out, with President Biden revealing some details of the 3-4 trillion infrastructure package at a speech in Pittsburgh and the ADP Employment report projecting a stellar gain of 552 thousand (12:15 GMT).
- AUD/USD faces resistance at 0.7744. Above, there is resistance at 0.7848
- 0.7560 is providing support. This line could face pressure if the AUD downturn continues. It is followed by support at 0.7460
The dollar index rose 0.38% to 93.30 overnight, and is at 93.23 today in Europe. The index is now well clear of its 200-day moving average (DMA) at 92.50, with the technical picture suggesting further gains to 94.30 ahead.
For a look at all of today’s economic events, check out our economic calendar. www.marketpulse.com/economic-event
Content 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 Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at firstname.lastname@example.org. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.