AUD/USD drops on Australian retail sales data
- AUD/USD drops on weak Aussie retail sales data.
- Australia's retail sales growth slowed to 0.2% in October, as expected.
- The losses could be short-lived as RBA is unlikely to cut rates before the year's end.
The bid tone around the Australian Dollar weakened, leading to a drop in the AUD/USD pair after the official data showed the Australian consumer spending growth slowed in October.
Australia's consumer spending, as represented by Retail Sales rose 0.2% month-on-month following September's 0.4% rise, the Australian Bureau of Statistics reported at 00:30 GMT. The data was tipped to show the retail sales growth slowed to 0.2%.
The AUD/USD pair, which recovered from 0.6907 to 0.6917 ahead of the retail sales, fell back to 0.6904 following the release of the key data.
The drop, however, could be short-lived, possibly because the Reserve Bank of Australia is unlikely to feel pressured to cut rates next month, as the data released last week showed the economy added 26,200 full-time jobs in September and the jobless rate fell to 5.2%, from a one-year peak of 5.3%, the first drop since February when it got as low as 4.9%.
Further, the TD Securities Inflation data released at 00:00 GMT also matched estimates by printing at 1.5% year-on-year and 0.1% month-on-month. Further, the US-China trade optimism could also put a bid under the AUD during the day ahead. As of writing, the pair is trading at session lows near 0.6904.