AUD/USD holds steady after strong Australia retail sales data
- The AUD/USD pair has been in a tight range recently.
- Australia published strong November retail sales data.
- Focus shifts to the Fed and US consumer inflation data.
The AUD/USD price was little changed on Tuesday morning as investors reflected on the latest Australian retail sales and trade numbers. The pair is trading at 0.7195, which is a few points above last week’s low of 0.7130.
Australia retail sales
The Australian economy did well in November going by the performance of the retail sector. Data by the country’s statistics agency showed that the headline retail sales rose from 4.9% in October to 7.3% in November. That increase was better than the median estimate of 3.9%.
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Australia’s retail sales did well as most people did their Christmas shopping early because of the fear of more lockdowns as the number of Covid-19 cases rose.
Additional data showed that the Australian exports and imports did well in November. Exports rose from -3% in October to 2% in November. Imports, on the other hand, rose from -3% to about 6% in the same period. As a result, the country’s trade surplus narrowed down from about $11.2 billion to $9.42 billion.
Still, there is a likelihood that the trade dynamics will be affected because of the ongoing lockdowns in some Chinese cities. This week, the country has locked down Xi’an and Tianjin, cities with over 20 million people. This is notable since Australia sells most of its goods to China.
US inflation data ahead
The next key catalyst for the AUD/USD pair will be a testimony by Jerome Powell, the Federal Reserve chair. He will talk about inflation and what the bank will do in the coming months. His written testimony said;
“We know that high inflation exacts a toll, particularly for those less able to meet the higher costs of essentials like food, housing and transportation. We are strongly committed to achieving our statutory goals of maximum employment and price stability.”
The testimony will come a day ahead of the of the official release of US consumer inflation data. Analysts expect the data to show that the country’s headline consumer inflation jumped to 7% in December.
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