Australian dollar awaits the release of retail sales

Photo by Steve Haag/Gallo Images/Getty Images

Brushing aside yesterday’s China manufacturing PMI-inspired bounce, the Australian dollar has fallen modestly overnight, tracking movements in global stock markets throughout the course of trade.

Having ventured above .7080 on the back of a weaker-than-expected US manufacturing PMI print, the AUD/USD fell to as low as .7016 before managing to regain its footing.

As of 8.30am AEST the AUD/USD currently buys .7031.

With Chinese markets off yet again, along with residents of Victoria for a controversial pre-AFL grand final public holiday, market liquidity is again likely to be thin, which may contribute to heightened volatility given the local and international data calendar ahead.

On the domestic front all attention will be on Australian retail sales for August. Having fallen unexpectedly in July, markets are looking for a snap-back of 0.4%.

Beyond that, market attention will switch to tonight’s all important US non-farm payroll report for September. Employment is expected to increase by 203,000 with the unemployment rate tipped to remain steady at 5.1%. Average weekly earnings are also expected to rise 0.2% following a 0.3% increase in August, something that will see the annual rate of growth jump to 2.4% if realised.

Given low liquidity, caution before the payrolls report this evening and major macroeconomic data being released in Australia, the grounds for an outsized market move on an unexpected retail sales result this morning are clearly in place.

That view is shared by Elia Haddad, senior currency strategist, who this morning notes the “Australian August retail sales data could generate some AUD volatility.”

The full Aussie dollar scoreboard is found below.

  • AUD/USD 0.7031 , 0.0005 , 0.07%
  • AUD/JPY 84.24 , -0.02 , -0.02%
  • AUD/CNY 4.4688 , 0.0031 , 0.07%
  • AUD/EUR 0.6282 , 0.0008 , 0.13%
  • AUD/GBP 0.4645 , 0.0002 , 0.04%
  • AUD/NZD 1.0974 , -0.0001 , -0.01%

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.