What a busy day in the Land Down Under! The Aussie had already been hit by two major reports earlier today.
1. Australia Retail Sales
Consumer spending in Australia missed expectations when it came in at 0.1% in July. That’s way weaker than the expected 0.4% growth! As it turned out, department store sales did a number on the data with its 7.9% decline in the month, the highest monthly slip in a year. The silver lining in the report is that spending on household goods went up by 1.8%, the biggest increase since February.
Looking back, the weak retail sales figures shouldn’t have surprised anyone. If you remember, the RBA had already hinted in its last monetary policy minutes that consumer spending might take a hit given that unemployment is ticking higher.
In any case, AUD/USD reacted negatively to the report as it got rejected at .9000 and was sent back to what looks like a neckline for a possible double bottom on the 1-hour chart.
2. RBA Interest Rate Statement
As expected, the Reserve Bank of Australia (RBA) kept rates steady at 2.50% in their interest rate decision today. Head honcho Stevens mentioned that policymakers are still waiting for the impact of the recent rate cut to kick in before making additional easing moves.
Aside from that, Stevens also pointed out that the Australian economy is likely to expand at a slower than usual pace for the rest of the year due to the slide in commodity prices, weak hiring, and low mining investments. Although AUD/USD has fallen by more than a thousand pips since the start of this year, Stevens insisted that the Australian is still trading at relatively high levels.
Despite the downbeat remarks from Stevens though, AUD/USD managed to jump back above the .9000 major psychological level, following the release of bleak retail sales figures.