- AUD/USD is aiming to stabilize above the 0.6760 hurdle for further gains.
- The US Dollar is displaying a subdued performance as the overall market mood is extremely bullish.
- Australian Retail Sales data is expected to decline to 0.3% vs. the former release of 0.6%.
The AUD/USD pair is displaying a lackluster performance in the Asian session amid a quiet market mood. The Aussie asset has managed to reclaim the 0.6760 hurdle after a minor sell-off in early Tokyo. Volatility in the currency market has been squeezed dramatically as trading activity is low in the United States due to Thanksgiving Day.
Meanwhile, the US Dollar is displaying a subdued performance in the Tokyo session after a wild move in early trade. The US dollar has turned sideways as the economic calendar has nothing much to offer. As odds for a slower rate hike by the Federal Reserve (Fed) have strengthened, the alpha generated by US Treasury bonds is under investors selling list. The 10-year US Treasury yields have extended their losses to near 3.66%.
Investors are pouring funds into the US Treasury bonds and risk-sensitive assets on the expectation that a shift to lower rate hike measures by the Fed in its December monetary policy meeting will accelerate economic projections. The dictations from the Federal Open Market Committee (FOMC) have already cleared that deceleration in the rate hike pace is necessary to reduce financial risks.
On the Australian dollar front, investors are shifting their focus toward the release of Retail Sales data. The economic data is expected to decline to 0.3% vs. the prior release of 0.6% on a monthly basis. A decline in consumer demand would delight the Reserve Bank of Australia (RBA) as lower retail sales will force the producers to lower their prices to accelerate demand. This might result in a decline in inflation ahead.