Australian Dollar Recovers After Starting Trading With Losses

The Australian dollar started Friday’s trading with losses but has recovered by the time of writing. Analysts considered the market sentiment to be positive for riskier currencies, especially after some major US stock indices reached new record highs on Thursday. Australian macroeconomic data released during Friday’s trading session was mixed but no report was outright disastrous.
The Australian Industry Group Australian Performance of Services Index rose from 52.9 in November to 54.3 in the December-January period (no separate report for December was released in January). A reading above 50.0 means that the sector has been expanding. Furthermore, it was the highest monthly reading since November 2019.
The Australian Bureau of Statistics reported that retail sales fell by 4.1% in December on a monthly basis, seasonally adjusted, according to the final revision. The actual reading was slightly better than market expectations and the preliminary report which showed a 4.2% drop. The decline followed an increase of 7.1% in November. Year-on-year, the indicator rose by 9.6%.
Philip Lowe, Governor at the Reserve Bank of Australia, testified before the House of Representatives Standing Committee on Economics today. He reiterated that the central bank does not plan to implement negative interest rates but the benchmark rate will remain at the current 0.1% level for the foreseeable future because most likely it is going to take years before inflation reaches the bank’s target and the labor market recovers:

So interest rates are going to be low for quite a while yet.

AUD/USD opened at 0.7598, fell to the daily minimum of 0.7583 but rebounded to 0.7604 by 7:47 GMT today. EUR/AUD traded about flat at 1.5734 after falling to the session low of 1.5726 earlier. AUD/JPY rebounded from the daily minimum of 80.04 to trade close to its opening level of 80.18.
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Original from: www.earnforex.com