Australian Dollar to US Dollar Exchange Rate Sees Little Movement Despite Strong US Retail Stats
Despite some stronger-than-expected US data during Monday’s American session, the Australian Dollar to US Dollar (AUD/USD) exchange rate has largely trended in a tight range since markets opened this week.
Following major gains for AUD/USD last week, from 0.7673 to 0.7767, the pair has largely trended within a tight region. On Monday, AUD/USD fluctuated between highs of 0.7781 and lows of 0.7759.
This was despite some solid US retail sales results from March, as investors were hesitant to make major movements on AUD/USD with political uncertainties still high and key Australian data due for publication later in the week.
Geopolitical uncertainty has weakened demand for both the Australian Dollar (AUD) and US Dollar (USD). While risk-sentiment improved slightly as fears of escalating conflict between the US and Syria lightened, investors also had little reason to buy into either currency.
Australian Dollar (AUD) Exchange Rates Investors Anticipate Australian Data
The Australian Dollar put in some solid gains against the US Dollar last week, but on Monday risk-sentiment was not strong enough to keep AUD/USD climbing. Recent Australian data has been underwhelming too.
Last week saw the publication of Australia’s business and consumer confidence results, which both worsened.
Then, later in the week it was reported that Australian consumer inflation expectations had slipped from 3.7% to 3.6% in April, causing market concerns that Australian inflation was still too subdued to support tighter Australian monetary policy any time soon.
While the Reserve Bank of Australia’s (RBA) latest financial stability review was relatively optimistic, investors were still hesitant to keep buying the ‘Aussie’ ahead of this week’s RBA minutes and Australian job stats.
As a result, AUD/USD was unable to hold last Friday’s highs.
US Dollar (USD) Exchange Rate Strength Limited despite Stronger Retail Sales
Monday’s US data boosted analyst confidence that weakness in US consumer trends was fading, but this was not enough to make the US Dollar more appealing to investors.
US retail sales improved from -0.1% to 0.6% month-on-month in March, beating the forecast 0.4%. The yearly print climbed from 4.1% to 4.5%, with the previous figure revised higher from 4.0%.
According to Omair Sharif, senior US economist at Societe Generale, the data was nothing particularly special though:
‘It’s nice to see the bounce-back here — to me it’s just on trend,
If you look at the quarter as a whole, we’re not breaking out from the kind of real spending numbers we’ve seen the last several years.’
Analysis like this may have limited any potential hawkishness on the US Dollar from the data.
Australian Dollar to US Dollar (AUD/USD) Forecast: Key Data and Political Developments in Focus
The Australian Dollar to US Dollar (AUD/USD) exchange rate could continue to trend in a narrow region in the coming sessions – at least until data or political developments influence movement.
While the coming week’s US economic calendar will be relatively quiet, major Australian data or even Chinese data could influence AUD/USD.
Tuesday’s Asian session will see the publication of China’s latest retail, industrial production and GDP growth results. As China is Australia’s biggest trade partner, this data could boost Australian Dollar support if it impresses.
Australia’s March job market results, due for publication on Thursday, could be even more influential, as could any developments regarding US and Chinese trade stances or other political news that may influence risk-sentiment.
US data due for publication in the coming weeks includes housing and industrial production data on Tuesday.
However, with multiple Federal Reserve officials holding speeches later in the week, Fed speculation may drive US Dollar movement instead.