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Australian Dollar Edges Higher After Positive Retail Sales

May 6, 2020 at 7:39 by Vladimir Vyun

Reverend John Flynn on Australian 20-dollar billThe Australian dollar rose a bit today following the release of a better-than-expected retail sales report. Gains were limited, though, as the market sentiment was mixed, failing to help the currency in finding direction.

The Australian Bureau of Statistics reported that retail sales climbed by 8.5% in March on a seasonally adjusted basis. Market participants were expecting an increase at the same 8.2% rate as in the preliminary report. The sales were up 0.6% in the prior month.

Yesterday, the Reserve Bank of Australia held a meeting to decide whether to change its monetary policy. As was widely expected, the central bank kept its benchmark interest rate unchanged at 0.25%. Furthermore, the RBA pledge to keep rates low until signs of economic recovery become evident:

The Board will not increase the cash rate target until progress is being made towards full employment and it is confident that inflation will be sustainably within the 2–3 per cent target band.

As for macroeconomic data released earlier this week, the Australian Industry Group/Housing Industry Association Australian Performance of Construction Index dropped from 37.9 in March to 21.6 in April, seasonally adjusted. That was the lowest level on record. According to a report from the Australian Bureau of Statistics, the number of building approvals fell by 4.0% in April on a seasonally adjusted basis. Still, the decline was nowhere near as big as a slump of 15.0% predicted by experts. ANZ Australian Job Advertisements sank by 53.1% in April. The Melbourne Institute Inflation Gauge was at -0.1% in April versus 0.2% in the previous month.

AUD/USD edged up from 0.6429 to 0.6442 as of 7:38 GMT today. EUR/AUD slipped from 1.6849 to 1.6808. AUD/JPY was down from 68.52 to 68.20 intraday but has bounced to 68.46 by now.

If you have any questions, comments, or opinions regarding the Australian Dollar, feel free to post them using the commentary form below.

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