Australian Dollar Mixed Following Upbeat Retail Sales

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  • Australian Dollar Climbs as Retail Sales Rise – ‘Aussie’ unable to sustain its gains through the European session however.
  • Reports of Brexit Buoy the Pound – MPs’ Brexit vote to dominate sentiment this week.
  • US CPI Stifles Demand for the US Dollar – Slide in inflation weakens Fed rate expectations.
  • Canadian Dollar Retreats as Oil Slides – Recent rally undermined by profit taking.

Australian Dollar Fluctuates Following Retail Sales Data

The Australian Dollar initially accelerated on Friday, being propelled higher by some stronger-than-expected retail sales figures and rising US-China trade optimism. However the ‘Aussie’ fell back again during the European session as investors flocked to other currencies.

In the absence of any notable data today, movement in AUD is likely to be driven by commodity prices, with another slide in iron ore prices potentially dragging on sentiment.

Pound Rallies on Brexit Delay Reports

The Pound rallied at the end of last week’s session amid reports that Brexit may be delayed. Citing anonymous cabinet sources, the UK’s Evening Standard Newspaper reported the UK’s timetable for leaving the EU may need to be extended due to the amount of outstanding legislature that still needs to be passed first.

Looking ahead, Brexit speculation is likely to continue to dominate GBP exchange rates through the first half of this week ahead of the Parliamentary vote on the EU withdrawal bill on Wednesday.

Euro Volatile as Week Closes

The Euro traded in a wide range on Friday, with the single currency enjoying some strong gains at the start of the European session as it took advantage of a weaker US Dollar. However the single currency was forced to relinquish these gains by the end of the session as a lull in data left the Euro unable to hold on to its gains.               

The release of the Eurozone’s latest industrial production figures later this evening will likely see the Euro tumble today, with an expectation contraction in production likely to reignite concerns of a slowdown in the bloc.

US Dollar Subdued as Inflation Falls

The release of the latest US CPI figures dragged on the US Dollar at the end of last week, leaving the currency range bound against the majority of its peers. While the slide in inflation was attributed to the fall in oil prices at the end of 2018 analysts still speculated this would be enough to rule out a rate hike from the Federal Reserve in the first quarter of 2019.

Coming up this week will be the release of the latest US retail sales figures, with a positive reading potentially offering some support to the US Dollar. 

Canadian Dollar Stumbles as Oil Prices Retreat

The Canadian Dollar trended lower at the end of last week, with an almost 2% slide in crude prices undermining the oil-sensitive ‘Loonie’.

Looking ahead, movement in the oil market is likely to continue to act as a catalyst for CAD exchange rates this week, with the only notable domestic release coming at the very tail end of the week with the publication of Canada’s latest inflation figures.

New Zealand Dollar Buoyed by Trade Optimism

The New Zealand Dollar enjoyed strong gains on Friday, with reports that China's Vice Premier Liu He may visit Washington later this month for high-level trade talks, helping to propel the risk-sensitive ‘Kiwi’ higher.

However the New Zealand Dollar may struggle at the start of this week’s session with a lull in domestic data  potentially limiting the currency’s momentum.

Data Released

January 14th 21:00 EUR Industrial Production (Nov) -1.3%

Post by TorFX

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