The AUD/USD pair is currently consolidating within a range, exhibiting minimal response to recent statistics.
The Australian dollar, in conjunction with the US dollar, has seen a slight increase, with the current AUD/USD exchange rate at 0.6610.
In December, retail sales in Australia experienced a more substantial decline than anticipated, falling by 2.7% m/m instead of the expected 1.7%. This data marks the weakest performance for the year. Following the release of these statistics, Australian bonds continued their ascent, leading to an increase in the three-year bond yield.
The dip in retail sales followed a revision of November's data, where retailers had offered significant discounts, reinforcing an established trend.
Consumers are evidently gravitating towards more affordable options as inflation increasingly impacts living standards.
The upcoming Reserve Bank of Australia meeting, scheduled for 5 or 6 February, might take the retail sales report into consideration. Given that consumption contributes to over half of the country’s GDP, any imbalances in this sector pose significant challenges.
The current RBA interest rate stands at 4.35% per annum, the highest in the past 12 years. The RBA has previously suggested that achieving an inflationary balance might necessitate further tightening of monetary conditions.