All trading involves risk. Losses can exceed deposits.

Aussie above $0.95

The Australian dollar is up 0.7% versus the US dollar after Australia released a strong set of retail sales figures.

All trading involves risk. Losses can exceed deposits.

AUD/USD is back above the important $0.95 level after September retail sales figures showed a 1.3% increase, topping analysts’ estimates of a 0.5% rise. In addition, over the weekend China revealed the fastest rate of increase in its non-manufacturing purchasing managers index (PMI) for 13 months. The October report came in at 56.3, up from 55.4 in September. Any reading above 50.0 indicates an expansion, so we can see that the sector is performing well.

Both these sets of economic data helped the Australian dollar, as China is a major destination for Australian exports. It would appear the interest rate cuts made by the Reserve Bank of Australia (RBA) over the past six months are paying off, as lower borrowing costs have boosted consumer demand.

The RBA has set interest rates at a record low of 2.5% and, as Chris Weston explained earlier, the bank is expected to keep rates on hold. But traders will be paying attention to the language the central bank uses. If it is suggested that rates will not be changed until the first quarter of 2104, we could head towards the $0.96 level.

Spot FX AUD/USD chart

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Find articles by analysts