AUD/USD: Muted response to above-forecast Aussie data
- AUD/USD adds just 10 pips one upbeat Aussie macro numbers.
- Aussie retail sales and producer price index bettered estimates.
- Trade tensions are likely coping the upside in the AUD.
AUD/USD is having a tough time cheering the upbeat Australian macro economic data released at 01: 30 GMT.
Australian Consumer spending, as represented by retail sales, rose 0.4% month-in-month in June, bettering the estimated growth of 0.3% and up from the preceding month’s print of 0.1%.
The producer price index (PPI) also rose 0.4% quarter-on-quarter in the second quarter, beating the expected figure of 0.3%. Thee annualized PPI also bettered estimate with a 2% print.
So far, however, the AUD/USD has managed to add just seven pips on upbeat data. The pair is currently trading at 0.6802, having hit a seven-month low of 0.6795 ahead of the Aussie data.
The AUD’s inability to score gains on the back of upbeat data could be associated with the escalating US-China trade tensions.
President Trump announced Thursday that the US will impose a new 10% tariff on $300 billion worth of products imported from China, saying Beijing is not living up to the promises it made in recent trade negotiations.
The US stocks responded by falling 1%. Further, the Asian stocks are currently reporting losses. Therefore, the path of least resistance for the AUD is to the downside.
The AUD/USD may pick up a bid if markets begin pricing additional rate cuts by the US Federal Reserve, courtesy of escalating trade tensions.
Pivot points