Australian dollar has reached new highs
2023.01.19 14:40
Australian dollar has reached new highs
For the first time since August, the Australian dollar crossed the symbolic 70 line earlier on Thursday. The pair has given up all of these gains, and in the North American session, it is still at 0.6986.
Retailers didn’t have a lot of fun in December because the traditional holiday season was a huge disappointment. For the second month in a row, consumers in the United States reduced their spending. Retail sales in December decreased by 1.1% as a result of lower vehicle sales as a result of higher interest rates on auto loans and lower gas prices. This was lower than the consensus of -0.8% and the revised November reading of -1.0%. Compared to November’s -0.6% decline and the forecast of -0.8%, core retail sales fell by -1.1%.
Another indication that inflationary pressures are decreasing was provided by today’s producer price inflation report. came in at -0.5% m/m in December, compared to the consensus of -0.1% and 0.2 percent in November. The rate increased by 0.1%, which was in line with the forecast but was lower than the 0.2% read in November (revised from 0.4%).
The markets are more optimistic that the Fed will end its rate-hike cycle after a 25-bp increase in February and possibly cut rates before the end of the year as inflation moves downward. Today, this sentiment has pushed the against the majors lower, and the US dollar will likely continue to lose ground if the economy continues to produce weak numbers.
On Thursday, Australia will publish data on employment and inflation. In November, it fell to 5.2%, and the December reading could indicate where inflation is headed. After an excellent gain of 64,000 jobs in November, the market is expected to have created 22,500 new jobs in December. AUD/USD volatility should be anticipated by traders on Thursday.
Technical analysis
- 0.6944 and 0.7027 are the next resistance lines
- AUD/USD has support at 0.6892 and 0.6810
