Australian dollar pushes north of 1.03 vs US dollar for first time in 2 months; central bank easing and retail sales seen as supportive

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Category: Australian Dollar News

Written by Sam Coventry

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"The improvement in retail sales jars with poor consumer sentiment, as does the strength in spending on services, which has underpinned strong growth in total consumption" - Kieran Davies at Barclays.

The Australian dollar (Currency:AUD) has been supported by a good set of economic data which combined with improved market sentiment over indications that world central banks are set to provide more monetary support to the global economy.

The pound Australian dollar rate is 0.17 pct in the red at 1.5228, the Australian dollar to US dollar exchange rate is 0.02 pct lower at 1.0281. (Our sister site, IMT, has the latest FX forecasts, access them and receive updates via this Facebook entry-way).



The Australian dollar received another boost overnight after the latest batch of upbeat domestic economic data.

Retail sales easily beat consensus estimates, vindicating yesterday’s RBA decision to water-down its easing bias.

AUD-USD reacted, pushing above 1.03 for the first time in 2 months.

Sales were up 0.5% and are on the mend after a dismal 2011.

"The improvement in retail sales jars with poor consumer sentiment, as does the strength in spending on services, which has underpinned strong growth in total consumption. Consumers are worried by Europe and are concerned about the impact of the carbon tax on the cost of living. The latter fear is overdone, as most of the tax's revenue is being recycled to households via tax cuts and welfare payment increases, which will cushion the tax's blow," notes
Kieran Davies at Barclays.

The New Zealand dollar is also on the offensive.

Richard Driver at Caxton FX says:

"With the BoE and ECB looking to ease monetary policy, the kiwi dollar should perform pretty positively this week.

"The kiwi dollar should provide an attractive alternative in light of monetary easing from the BoE and the ECB this week.

"The RBNZ is showing no real appetite to cut interest rates from their current level of 2.50%. We expect sterling to remain under pressure against the kiwi dollar, but for now it trades at 1.9450."