Australian Retail Sales printed at half the rate of expectation briefly sending the Aussie dollar below the 1.0200 level in Asian session trade before the currency rebounded on some corporate bargain hunting and a general rebound in risk appetite. Retail Sales in August expanded at only a 0.2% rate versus expectations of 0.4% gain as consumers Down Under remained cautious amidst a slowing economic environment.
Overall retail sales were soft with consumers spending -1.5% less on household goods while demand at cafes and restaurants dropped -0.9%. However department stores sales surged by 6.9%. Final demand in Australia is clearly slowing amidst concerns over the global economy and a marked decline in exports of iron ore and coal from China. As Australian economic data continues to deteriorate markets are betting that the RBA will lower rates once again with interest rate futures indicating a 75% chance of another 25 basis point cut in the benchmark rate in November.
The Aussie tumbled below the 1.0200 level in the aftermath of the release, but rebounded in European trade on some corporate demand and uptick in risk appetite after the first US Presidential debate showed that the challenger Mitt Romney clearly won the night. Despite the recovery in overnight trade the Aussie remains under heavy selling pressure as the economic news from the region continues to disappoint. The pair sees very heavy short term support near the 1.0150 level, but if that barrier is broken over the next several days, the move towards parity will become almost inevitable.
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Australian Retail Sales Miss Raising Prospect Of Another Cut
Published 10/04/2012, 06:49 AM
Updated 07/09/2023, 06:31 AM
Australian Retail Sales Miss Raising Prospect Of Another Cut
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