Australian Dollar Softened by Slumping Sales

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  • Australian Dollar Down after Sales Report – Consumer spending slows
  • Pound Sterling lifted by reopening of UK markets – GBP consolidates gains as trade volumes rise
  • GBP/USD pressured by Powell remarks – US Dollar lifted by Fed rate hike speculation
  • RBNZ policy meeting in focus – NZD dips before gathering

Retail Spending Slips, Australian Dollar (AUD) Exchange Rates Decline

The Australian Dollar didn’t have a great trading session on Tuesday, with the currency falling following the release of Australia’s latest inflation figures. Retail sales excluding inflation only rose 0.2% in the first quarter, quarter-on-quarter, rather than the 0.6% expected. Sales stagnated on a monthly basis in March.

Rising US rate hike expectations also kept higher-risk currencies like the Australian Dollar under pressure.

The Australian Dollar accordingly fell by over 1% against the US Dollar and lost 0.5% against the Pound.

Pound Sterling (GBP) Exchange Rate Advances as UK Markets Reopen

Pound (GBP) exchange rates ticked higher during the European session with the return of UK traders following the long bank holiday weekend bolstering trade volumes and helping Sterling consolidate Monday’s gains.

However the Pound faced some hurdles, most notably the release of the UK’s latest housing data, which revealed house prices slumped by 3.1% in April, the fastest monthly fall in almost a decade.

EUR Exchange Rates Stabilise as German Industrial Production Rebounds

The Euro (EUR) returned to a steadier footing as Monday’s weak Eurozone data was offset by the latest German production figures.

Data revealed German industrial output rocketed up by 1% in March after previously plummeting -1.7%.

While the figures came as a relief to EUR investors, they weren’t enough to boost hopes that the European Central Bank (ECB) could be persuaded into raising interest rates anytime in the foreseeable future.

USD Exchange Rate Buoyed by Rising Fed Rate Expectations

US Dollar (USD) exchange rates continued their recent uptrend yesterday, with the Greenback propelled higher by remarks from Federal Reserve Chair Jerome Powell. Powell hinted at further monetary tightening from the US central bank, and the US Dollar rallied against the Australian Dollar and Pound.

Further lifting USD exchange rates was the publication of the latest US job opening figures, as the number of openings surged to an all-time high of 6.5m.

CAD Exchange Rates Fluctuate as US Dollar Dominates

While the Canadian Dollar was able to gain on the Australian and New Zealand Dollars, the ‘Loonie’ lost ground to the US Dollar and Pound as domestic housing starts fell short.

CAD also dropped -0.7% against a rallying US Dollar.

GBP/NZD Exchange Rate Bolstered by Dip in Risk Appetite

The Pound New Zealand Dollar (GBP/NZD) exchange rate ticked higher during Tuesday’s session as the ‘Kiwi’ faced considerable pressure in face of the US Dollar’s broad rally. The New Zealand Dollar was also struggling ahead of this week’s Reserve Bank of New Zealand interest rate decision.

Data Released

08:45 NZD Retail Card Spending
09:01 GBP BRC Like-for-Like Sales
22:30 CAD Building Permits (March)

Post by TorFX

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