Australia retail sales falls 0.1% in December
The Australian dollar is seen to be trading weaker this morning after retail sales for December contracted by 0.1%, which was in contrast to the expectations of a 0.3% increase. The U.S. dollar is also showing some signs of strength after the greenback turned weaker on Friday following the January payrolls report.
Retail sales in Australia hit a rough patch in December as official reports suggested a contraction during the holiday busy month
Data from the Australian Bureau of statistics showed on Monday that retail sales in Australia fell 0.1% against expectations of a 0.3% increase. The decline in retail sales came amid a sharp decline in demand for household goods but this was offset by higher spending on clothing and good. The weakness is said to have been exaggerated by the closure of a large retail store chain in the final few months of 2016.
The Australian dollar gapped lower this morning on the retail sales report and is likely to come under pressure as the Reserve Bank of Australia will be meeting later in the week. No changes are expected from the central bank, but recent weakness in the economy including a contraction in the GDP during the third quarter, the weak pace of increase in inflation and today’s retail sales could see the RBA strike a dovish tone.
How to trade binary?
AUDUSD is trading within Friday’s range but expect the current declines to slow as we could see some retracement towards 0.7670 where daily PUT options can be purchased for an expiry time of 21:00 GMT. The pullback towards 0.7670 will likely trigger stronger declines to come as traders position themselves ahead of the RBA meeting which is due tomorrow.
Target price: 0.7670
Expiry: 21:00 GMT