Retail Sales Overview
Early Monday in the Asia-Pacific region, the market sees preliminary readings of Australia’s seasonally adjusted Retail Sales for October month at 00:30 GMT. Market consensus suggests a softer MoM print of 0.6%, suggesting the lack of sustained improvement in economic activity.
Given the recently mixed Aussie data and the Reserve Bank of Australia’s (RBA) cautious mood, not to forget the challenges to sentiment from China, today’s Aussie Retail Sales appear the key for the AUD/USD traders.
In his latest comments, RBA Governor Philip Lowe mentioned that demand is too strong in comparison to supply.
Ahead of the data, Westpac said,
Australia October retail sales should begin to exhibit a clearer impact from interest rate rises, though it will likely be mild (Westpac forecast: 0.2%).
How could it affect AUD/USD?
AUD/USD remains pressured towards 0.6700 after beginning the week’s trading with a downside gap, holds lower ground near 0.6720 by the press time. Covid and political fears emanating from China appear to exert downside pressure on the Aussie pair as of late.
That said, the likely easy economics from Australia may add losses to the AUD/USD prices amid recently sluggish comments from RBA officials. The pair’s downside, however, appears limited as traders may wait for Friday’s speech of RBA Governor Philip Lowe and the US jobs report for clear directions. Even so, the risk-aversion wave may join the Aussie Retail Sales to please the intraday sellers if the outcome is softer.
Technically, a convergence of the 100-Day Moving Average (DMA) and an upward-sloping support line from November 04, around 0.6690, restricts the short-term AUD/USD downside.
About Australian Retail Sales
The Retail Sales released by the Australian Bureau of Statistics is a survey of goods sold by retailers based on a sampling of retail stores of different types and sizes and it’s considered an indicator of the pace of the Australian economy. It shows the performance of the retail sector over the short and mid-term. Positive economic growth anticipates bullish trends for the AUD, while a low reading is seen as negative or bearish.