AUD/USD falls 1.2% on soft data, USD strength
Australian dollar suffers amid weak Australian retail sales and a slowing Chinese manufacturing sector, compounded by a resilient USD surge ahead of key FOMC and job data releases.
Key points
- AUD/USD back under 0.6500
- Australian Retail Sales missed expectations, dropping 0.4% MoM
- Chinese Manufacturing PMI lowered to 50.4
- US Employment Cost Index beat expectations, growing 1.2% in Q1 2024
AUD/USD back under 0.6500
Following a brief surge above 0.6560 on Sunday night, the AUD/USD depreciated into Tuesday morning, dipping below the 0.6500 price level. Remarkably, the AUD/USD pair has only settled below this mark for 13 trading days this year, underscoring the significance of this recent decline.
AUD/USD price history
Australian Retail Sales contract, missing targets
AUD/USD faced additional pressure after the release of Australia’s monthly retail sales data on Monday nighr, which contracted by 0.4%, falling short of the expected 0.2% increase. This disappointing figure contributed to the pair’s downward trajectory, highlighting the sensitivity of forex markets to economic indicators.
Chinese manufacturing slowed in April
April's Chinese NBS Manufacturing PMI dipped to 50.4 after reaching a 12-month peak in March. Despite still indicating expansion, the decline was a setback for Chinese officials aiming for sustained economic growth. The Australian dollar, deeply intertwined with China’s economy due to trade reliance and geographical proximity, was further impacted by this slowdown.
US dollar appreciated ahead of FOMC, jobs data
The US dollar saw gains against major currencies Tuesday morning as minor employment data, including a stronger-than-anticipated Employment Cost Index (ECI) of 1.2% in Q1 2024, emerged. This uptick, occurring just before significant events like the FOMC meeting and Nonfarm Payrolls release, bolstered expectations of robust US data and a possible interest rate hike, propelling the US dollar higher.
How to trade AUD/USD
- Open an account to get started, or practice on a demo account
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- Open, monitor, and close positions on AUD/USD
Trading forex requires an account with a forex broker like IG. Many traders watch major forex pairs like GBP/USD and USD/JPY for potential opportunities based on economic events such as inflation releases or interest rate decisions. Economic events can produce more volatility for forex pairs, which can mean greater potential profits and losses as risks can increase at these times.
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