AUD/USD has refreshed its day’s low a little below 0.6800 amid a recovery in the US Dollar.
The US Dollar picked strength despite US Retail Sales landing below expectations at 0.2%.
RBA minutes conveyed that further policy tightening could be done in August.
The AUD/USD pair has printed a fresh intraday low marginally below the round-level support of 0.6800 in the early New York session. The Aussie asset has come under pressure as the United States Retail Sales data has failed to match expectations.
US Census Bureau has reported that Retail Sales in June expanded at a pace of 0.2% while the street was anticipating an expansion of 0.5%. In May, US retail demand was expanded by 0.3%. Also, Retail Sales excluding automobiles have posted growth of 0.2% vs. consensus and the former release of 0.2%.
After a sheer slowdown in inflation and easing labor market conditions, soft retail demand by US households might force Federal Reserve (Fed) policymakers to turn neutral on interest rates. One small interest rate hike from the Fed in its July meeting is highly expected but the central bank could hold interest rates at 5.25-5.50% till the end of the year.
The US Dollar Index (DXY) has picked strength near 99.60, however, the downside bias has not faded yet. The yields offered on 10-year US Treasury bonds are hovering around 3.77%. Meanwhile, S&P is expected to open on a flat-to-negative note considering caution in overnight futures.
On the Australian Dollar front, Reserve Bank of Australia (RBA) minutes released in Asia conveyed that further policy-tightening could be done in August. RBA policymakers are worried that higher interest rates dampening Australia’s economic prospects.
Going forward, Thursday’s Employment data will be keenly watched. According to the estimates, the fresh addition of payrolls is seen at 17K, significantly lower than the former release of 75.9K. The Unemployment Rate is expected to remain steady at 3.6%.
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