The Australian Dollar (AUD) remains stable against the US Dollar (USD) following the recent Retail Sales report, which showed no growth in July compared to the expected increase of 0.3%. On the other hand, stronger-than-expected US Gross Domestic Product (GDP) data for the second quarter has put pressure on the AUD/USD pair.
Despite the stagnant Retail Sales, the AUD/USD pair may see further gains due to July’s higher-than-expected Consumer Price Index (CPI), leading to expectations of a more hawkish policy stance from the Reserve Bank of Australia (RBA). Recent RBA Minutes also indicated that a rate cut is unlikely in the near future.
While the US Dollar received support from positive economic data, dovish comments from Federal Reserve officials may limit its gains. Markets are anticipating a rate cut by the Fed in September, with close attention on the upcoming US Personal Consumption Expenditure (PCE) Price Index release for clues on future interest rates.
Analysis and Breakdown:
The Australian Dollar remains steady against the US Dollar despite stagnant Retail Sales in July. Stronger US GDP data and expectations of a Fed rate cut could impact the AUD/USD pair. The RBA’s hawkish stance and the possibility of no rate cuts in Australia provide support for the AUD. On the other hand, dovish Fed comments and anticipation of a rate cut in the US may limit the USD’s gains. Investors should monitor upcoming economic data releases for further insights into currency movements and potential trading opportunities.