The Australian dollar is at a four month low

Photo: Quinn Rooney/Getty Images.

The Australian dollar slumped to a four month low after retail data missed by a mile.

The Aussie, which was quoting at $US0.7392 before the data, slumped to as low as $US0.7364. That is its lowest level since January 11. A short while ago it was trading at $0.7368.

Australian retail turnover fell 0.1 per cent in March 2017, seasonally adjusted, according to the latest Australian Bureau of Statistics (ABS). This follows a fall of 0.2 per cent in February.

Signs of any consumption slowdown concern investors as they add to odds of an interest rate cut, which would pull down the currency.

Food retailing, cafes, restaurants and takeaway food services both slipped 0.5%, department stores saw a 0.6% fall and household goods retailing slid 0.1%. These falls were offset by a 1.1% rise in other retailing and a 0.4% climb in clothing, footwear and personal accessory retailing (0.4 per cent).

Last month Morgan Stanley analysts said the banking regulator’s intervention to apply the brakes on speculative housing activity by limiting the flow of interest-only lending could directly strip billions of dollars out of household consumption. It blamed bank moves to reprice mortgages and the clampdown for forcing investors to wade into principal and interest repayments, rather than just servicing the interest-only component.

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