The Australian dollar strengthened against the other major currencies in the Asian session on Thursday, as disappointing U.S. retail sales data fueled speculation that the Federal Reserve may delay interest rate normalization further.
Data from the Commerce Department showed on Wednesday that U.S. retail sales were unexpectedly flat in the month of April. The report said retail sales were virtually unchanged in April following an upwardly revised 1.1 percent increase in March. Economists had expected retail sales to edge up by 0.2 percent.
The report has reinforced the view that the Federal Reserve is not likely to raise interest rates next month, but the data has also raised some concerns about the economic outlook.
Wednesday, the Australian dollar rose 1.55 percent against the U.S. dollar, 0.89 percent against the yen, 0.44 percent against the euro, 0.27 percent against the kiwi and 0.91 percent against the loonie.
In the Asian trading today, The Australian dollar rose to near 4-month highs of 0.8162 against the U.S. dollar and 97.28 against the yen, from yesterday’s closing quotes of 0.8111 and 96.65, respectively. If the aussie extends its uptrend, it is likely to find resistance around 0.83 against the greenback and 98.70 against the yen.
Against the Canadian dollar and the euro, the aussie advanced to a 1-1/2-month high of 0.9746 and a 2-week high of 1.3911 from yesterday’s closing quotes of 0.9698 and 1.3993, respectively. On the upside, 0.98 against the loonie and 1.36 against the euro are seen as the next resistance levels for the aussie.
Looking ahead, preliminary Japan machine tool orders for April is due to be released.
In the New York session, U.S. jobless claims for the week ended May 9, U.S. PPI for April and Canada new housing price index for March are slated for release.
At 10:00 am ET, European Central Bank President Mario Draghi will give the Michel Camdessus Central Banking Lecture at the International Monetary Fund in Washington D.C.
At 3:30 pm ET, Bank of Canada Deputy Governor Lynn Patterson is expected to speak at the Chartered Financial Analysts Society in Vancouver, Canada.
Most European banks are closed in observance of the Ascension Day holiday.
The material has been provided by InstaForex Company – www.instaforex.com