The Australian dollar has had a tough few months, losing over 8% since January against a thriving US dollar. While a short reprieve this week, driven mainly by a boost in commodities, saw the AUD reach a monthly high of USD 0.7605, the broader trend has been downward, reflecting a slowdown in the global economy and Australian cash rate outlook.
After the Reserve Bank of Australia (RBA) confirmed recently that a rate hike this year is unlikely, customers waiting for the Australian dollar to strengthen may instead look to local economic data to help gauge its direction.
Over the next few weeks we’ll see Building Approvals (30/5) and Retail Sales (04/6) figures for April, both of which bore surprising results for March. Building approvals managed to defy a broad slowing down in property to rise 2.6% MoM, while retail sales came in unchanged, a disappointing result after a solid increase in February.
Recent data from the National Australia Bank (NAB), indicates that retail sales may have fallen even further in April, which could mean the tough times aren’t yet over for the Australian dollar.