The Australian dollar suffered a few setbacks after topping 0.80. However, it does not seem to give up. Not so fast.
Here are three reasons tor the recovery of AUD/USD:
1 – Retail sales
Retail sales surprised in Australia for the second time in a row: this advanced 0.3 % in June against 0.2% expected. In Q2, retail sales increased by a total of 1.5%, also above early estimations.
Consumption is key to Australia’s shift away from the mining sector to other sectors.
2 – RBA Report
The RBA tried to cool things down. In the Monetary Policy Statement, the organization led by Phillip Lowe lowered forecasts GDP is now expected to rise between 2% to 3% in 2017 and 2.75% to 3.75% in 2018. They did raise the GDP forecast for 2019.
Once again, the RBA complained about the exchange rate, saying it would lower economic growth and inflation. However, there is nothing new here.
3 – Fresh USD weakness
The US dollar is on the back foot once again. The fresh falls come despite tensions towards the Non-Farm Payrolls (NFP preview). However, a key hint towards the event provides an ominous sign: the services sector significantly slowed down. The ISM Non-Manufacturing PMI fell sharply and triggered worries.
AUD/USD is trading around 0.7975, already looking at the round level of 0.80. Further resistance awaits at 0.8065, followed by 0.8165 and 0.83. Support awaits at 0.79 and 0.7835.
