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Aussie Rebounds As Retail Sales Surprise to the Upside

Last updated 5/7/2012 3:41 AM ET (GMT -5) 0 Comments - Add your comment

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Boris Schlossberg

Director of Currency Research, GFT

Australian Retail Sales suprised to the upside  rising at their best rate in nearly a year in March helping to stabilize the AUD/USD as expectation of another rate cut by the RBA eased. Australian Retail Sales rose by 0.9% versus 0.3% eyed driven by spending on new homes, restaurants and shoes. This was the best rise in Retail Sales since April  of last year and the third consecutive positive month this year.

The news helped to ease investor concern over another possible rate cut but the RBA in June after the central bank surprised the market with a 50bp cut last week. However, the positive data on the consumer front was offset by weaker news from the labor market where the ANZ Job advertisements  declined by -3.1% after rising 0.7% the month prior.

For now the prospect of another imminent rate cut by the RBA  remains a push with tomorrow's Trade Balance data likely to be an important data point Australian monetary authorities to consider.

Aussie fell to session lows of 1.011 in early Asian trade on broad risk aversion selloff in the wake of French and Greek election, but has since recovered all of its losses to trade back to 1.0150 in morning European  dealing.  The pair could rally back towards the 1.0200 handle if short covering flows continue into North American trade, but it remains in a deep downtrend  and any new selloff in equities will likely push it to a test of 1.0100 figure as the day proceeds.   

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About The Author

Boris Schlossberg began his Wall Street trading career more than 20 years ago at Drexel Burhnam Lambert. There, he traded nearly every type of financial product on the market in the U.S., from equities and options to stock index futures and foreign exchange. His innate ability to analyze market information and use it to trade has helped him become an industry-recognized, “go to” trading professional.

These days, whenever the markets move, many organizations turn to Schlossberg for his take on the situation. He is a weekly contributor to CNBC's Squawk Box and a regular commentator for Bloomberg radio and television. His daily currency research is widely quoted by Reuters, Dow Jones and Agence France Presse newswires and appears in numerous newspapers worldwide. Schlossberg has written for publications like SFO magazine, Active Trader and Technical Analysis of Stocks and Commodities. He is also the author of Technical Analysis of the Currency Market and the co-author of Millionaire Traders: How Everyday People Are Beating Wall Street at Its Own Game with Kathy Lien. He joined GFT in 2008.