The Australian Dollar was well matched versus the US Dollar on Wednesday as investors digested better than forecast Australian retail sales and dire US private payroll data.
At 15:00 UTC, the AUD/USD -0.02% at US$0.6430. This is approximately in the middle of the daily traded range of US$0.6415 – US$0.6453. The Australian Dollar US Dollar exchange rate is consolidating so far this month after surging 6.1% across April.
Australian Retail Sales Impress
The Aussie Dollar is finding support from upbeat retail sales data. According to figures from the Australian Bureau of Statistics retail sales surged by the most on record in March, as panic buying drove sales.
Retail sales jumped 8.5% month on month last month, higher than the 8.2% that analysts had forecast. Food items alone soared by 24%. Household goods also jumped as people brought the necessary items to work from home.
The data comes following the Reserve Bank of Australia’s monetary policy announcement on Tuesday. The central bank, as expected kept interest rates on hold. However, they did start to taper the bond buying programme, in an unexpected hawkish move.
With the number of coronavirus infections under control, the Australian economy is being slowly reopened. However, RBA governor Philip Lowe warned off very tough times ahead.
Investors will now look ahead to Australian trade balance due Thursday morning local time.
ADP Worse Than Forecast
The US Dollar is also trading broadly higher versus its major peers on Wednesday after US ADP private payroll report revealed that 20.2 million jobs in the private sector were lost in April as the coronavirus lockdown forced millions of businesses to close their doors. This is proving to the biggest crisis for American workers and the US labour market in a century.
Delving deeper into the numbers, small companies axed 6 million workers, mid-sized firms slashed 5.3 million jobs and large businesses axed over 8.9 million jobs.
The ADP report is closely watched because it is a strong lead indicator for the Labour Department’s more complete non-farm payroll report due on Friday.
