There’s proof this morning that there is sometimes precious little the RBA can do to dampen the Aussie dollar. It surged to 81 cents overnight on the back of weaker than expected US retail sales.
At 0.8101 this morning, it’s up 1.65% over the past trading day since 7am yesterday. The euro is up 1.19% and the Kiwi is up 1.65%, so it’s not about the Aussie.
Key to the move, which took the Aussie to its highest level since January 21, is that not only did retail sales – which printed 0.0% against an expected rise of 0.2% for April – miss expectations but when auto sales were stripped out, the rise was just 0.1% against 0.5% expected.
This is worrying traders about what the Fed might do and when.
That means that the Aussie might rally further. 83 cents is now looking like a reasonable technical target.