The Australian dollar is on the defensive in early trade in Asia

Scott Olson/Getty Images

The Australian dollar is weaker in early Asian trade on Monday, particularly against the US dollar.

First, here’s the scoreboard as at 8.05am AEDT:

  • AUD/USD 0.7664 , -0.0019 , -0.25%
  • AUD/JPY 86.15 , 0.06 , 0.07%
  • AUD/CNH 5.2114 , -0.0017 , -0.03%
  • AUD/EUR 0.7098 , -0.0009 , -0.13%
  • AUD/GBP 0.6133 , -0.0002 , -0.03%
  • AUD/NZD 1.0490 , 0.0009 , 0.09%

The renewed weakness in the AUD/USD has coincided with yet another failure to break convincingly above the 77 cent level on Friday despite a mixed US non-farm payrolls report for January.

Payrolls increased by a mammoth 227,000. However, the unemployment rate ticked up to 4.8% thanks to a lift in labour market participation. Wage growth also underwhelmed, suggesting that there’s no real urgency for the US Federal Reserve lift interest rates in the near-term.

However, technical selling, renewed weakness in base and bulk commodity prices and hawkish remarks from a leading Fed official all worked in tandem to drag the Aussie lower, a move which has continued in early trade today.

AUD/USD Daily Chart

Later in the session, there’s several key Australian data releases scheduled, including December retail sales.

Retail sales are expected to lift 0.3%, following a disappointing 0.2% rise in November. The report will also contain retail sales volumes for the December quarter which are expected to lift 0.9%. This figure feeds into household consumption in Australia’s GDP report, and accounts for around 30% of total consumption.

Previously, volumes fell by 0.1%, a shock outcome that contributed to Australia’s 0.5% GDP contraction in the September quarter last year.

Alongside the retail sales report, ANZ will also release its monthly job ads survey for January.

Both are scheduled to hit at 11.30am AEDT.

Outside of the Australian releases the calendar is quiet, something that along with the Superbowl in the United States will likely keep market activity muted.

If anything, the performance of Chinese markets and the USD/JPY will likely prove to be influential on broader currency markets, including on the Aussie.

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