Aussie dollar continues to trade above 64 US cents

Daily Currency Update

The Australian dollar is slightly weaker this morning when valued against the Greenback, trading just above 64 US cents. The Aussie dollar is expected to continue its downside trend as the appeal for safe-haven assets has improved. The US Dollar recovered further overnight as Federal Reserve (Fed) policymakers see the need for more interest rate hikes to tame inflationary pressures in the coming months. The Australian dollar failed to gain strength despite an interest rate hike from the Reserve Bank of Australia (RBA) on Tuesday. The RBA raised its Official Cash Rate (OCR) by 25 basis points (bps) to 4.35%. RBA Governor Michele Bullock kept hopes of further rate-tightening alive, citing that the progress in inflation declining to 2% has slowed and risks of persistent consumer inflation have escalated.

On the data front, this week Australian retail sales volumes rose 0.2% in the September quarter of 2023, Australian Bureau of Statistics (ABS) data revealed. ABS head of retail statistics Ben Dorber said the small rise in retail sales volumes follows three quarterly falls in a row. Retail volumes fell by 0.6% in the June quarter, 0.7% in the March quarter, and 0.6% in the December quarter of 2022. Despite the rise, retail sales volumes are down 1.7% compared to the September quarter last year. Compared to the same time last year, retail prices remain high, up 3.7% but are down considerably from the peak price growth of 7.6% in December quarter 2022. Other retailing was the only non-food industry to record a fall in the September quarter at negative 0.4%. This was the fourth quarterly fall in a row as volumes continue to moderate from the highs seen through the COVID-19 pandemic period.