Australian Dollar Weak as Retail Sales Decline

The Australian dollar was the weakest currency on the Forex market today, falling even against its commodity-geared counterparts, though managing to pare losses versus them by the time of writing. One of the possible reasons for the Aussie’s weakness was the worsening market sentiment. Another one was a disappointing retail sales report.
Friday’s trading session started on a positive note for the Australian currency as Markit released solid flash PMI figures for Australia. The manufacturing Purchasing Managers’ Index climbed to the 49-month high of 57.2 in January from 55.7 in December. The services PMI slipped to 55.8 from 57.0 but remained firmly above the neutral level of 50.0, meaning that the industry continued to expand at a solid, albeit somewhat slower, pace.
Yet the Aussie started a decline after the release of data that showed a drop of retail sales by 4.2% in December from November, which followed an increase of 7.1% in the previous month. Market participants were expecting a much smaller decrease of 1.5%. It was a preliminary figure. The Australian Bureau of Statistics started to release interim reports last year to better track the impact of the COVID-19 pandemic on the economy.
Adding to the downside momentum of the currency was the market sentiment, which worsened after China initiated a partial lockdown in Beijing. On top of that, investors were worried that trade tensions between Australia and China may hurt the Australian economy. Such concerns were also detrimental to the currency of Australia.
AUD/USD dropped from 0.7763 to 0.7724 as of 14:59 GMT today, reaching the low of 0.7702 intraday. EUR/AUD rallied from 1.5655 to 1.5759, and its daily high was at 1.5804. AUD/CAD traded flat at 0.9804 after reaching the daily high of 0.9823 and the low of 0.9785.
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Original from: www.earnforex.com