The AUD/USD pair caught a fresh bid in the Asian session today, retesting the highly coveted 0.6700 level. And today, the Aussie dollar gained some muscle against the greenback with the help of better-than-forecast retail sales figures.
The preliminary MoM retail sales data came in at 0.2%, exceeding analysts’ predictions of 0.1%. However, the numbers displayed a significant drop from January’s 1.8% print. So, while the retail sales figures weren’t exactly party poppers, they were still good enough to push the Aussie dollar up.
The retail sales print could also indicate that consumers are getting cautious about spending, possibly due to the Reserve Bank of Australia’s recent interest rate hikes. This development is significant because it strengthens the case for the RBA to pause at its upcoming April meeting.
Economic Data releases this Week Could Influence the AUD/USD Pair
But that’s not all! We have a bunch of economic event risks lined up this week that could impact the AUD/USD pair. On the US front, the CB Consumer Confidence data is due today, while the GDP and the Core PCE inflation gauges will be released on Thursday and Friday, respectively. Meanwhile, on the Australian front, the CPI data is expected to be released tomorrow.
If you’re wondering why the currency market is paying so much attention to these events, it’s because they could provide some clues about the future of the AUD/USD pair. A higher-than-expected CPI figure could see bets fade for a pause from the RBA, while a lower-than-expected figure could add further credence to a potential pause.
Apart from the better-than-expected retail sales figures, the AUD also benefited from an improvement in risk sentiment and a lackluster start to the week by the USD. With the progress in global vaccination efforts and hopes of a quicker economic recovery, investors are getting more comfortable with riskier assets, which bodes well for the AUD/USD pair.
In conclusion, the AUD/USD pair’s retest of the 0.6700 level may not have set the currency market on fire, but it’s still good news for the Aussie dollar. With several economic events posing risks on the horizon, investors will be keeping a close eye on the pair’s movements.
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