Forex Marketz Daily Forex News – Fully Markets Update
The Australian dollar, especially in the benchmark AUD/USD Forex market, rallied today as better than expected Australian retail sales data crossed the wires. Earlier this week the Australian dollar reacted well to housing data, was the same again. Today the retail sales growth came in at its best growth in almost five years.
Australia’s households purchased retail goods in large amounts. This helped to contribute to a 1.2 percent monthly growth for the month of November 2017. This was way above the growth of 0.4 percent expected. It was well above the growth of 0.5 percent in October.
The category which grew the most was household goods. This category came in at positive 4.5 percent. Last month, October, came in at only 0.2 percent. This was a month before the winter holidays which is a big shopping month.
Australian Dollar Gains should be Capped
While consumption does play a big role in their economy and solid retail growth should boost overall economic growth, the Reserve Bank of Australia is in no rush o change monetary policy or their official cash rate stance. It is at a record low of 1.5 percent and will stay their probably into next year, 2019.
However, the United States Federal Reserve Board is expected to hike rates at least three times this year. This will give the U.S. dollar the advantage when it comes to yield. This should cap any short term rally in the Aussie dollar. The AUD is also a sensitive commodity currency. Gold is expected to weaken and it will also track the Chinese economy as well.
