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Economic Statistics: Aussie retail sales data disappoints

Posted by Akhilesh Ganti on May 5, 2013 9:42:00 PM

Australian retail sales for March posted a decline of 0.4% which was weaker than market estimates of +0.2%. AUD/USD, which had been trading around 1.03, fell to a session low of 1.0269 before rebounding a bit to its current level of 1.0282. The sluggish economy and nervousness about future prospects were cited as the main culprits for this unexpected decline as consumers spent less on household goods, clothing and footwear. The RBA had been quite aggressive in lowering rates since 2011 in an attempt to stimulate the economy but the recent spate of soft economic data will probably increase the pressure on them to do more. They had maintained the rate at 3.0% the last time they met and had stated that there was evidence that past rate reductions were beginning to take effect. They meet again on May 07 and it will be interesting to see if they stand firm or give in to market pressure and lower rates to a record low of 2.75%.

{chart:Bloomberg}(click to enlarge)

Australia retailSales mar2013


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