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Aussie Drops Through 1.07 on Weak Retail Sales

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Much like their counterparts in Germany, Australian consumers are disregarding the increase in purchasing power that comes with surging currency and instead are becoming more cautious in the wake of greater economic uncertainty both at home and abroad.

Although the RBA has continuously stated that it will look through the "noise" of recent disturbances, today disappointing results are likely to keep the central bank on the sidelines well into Q2 of this year as monetary authorities look for signs of stabilization in consumer demand before considering further tightening.

The news helped to send Aussie through the 1.0700 figure in early Asian trade and although the unit rebounded somewhat into the European open it remains heavy as traders continue to take profits after its parabolic run to 1.1000 figure earlier this week. With BoE and ECB meeting scheduled for later today risk flows are likely to determine near term direction and if currency markets are disappointed by what they hear from Mr. Trichet the Aussie could revisit 1.0700 in a broad risk FX selloff as the day progresses.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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