- AUD/USD closes 6-day rally
- Australian retail sales decline
- Fed warns banks that they are tightening up credit
The Australian dollar has entered negative territory after a rally that lasted close to 200 point. In the European session, the AUD/USD trades at 0.6760, down by 0.29% for the day.
Australian retail sales decline
Australian retail sales fell 0.6% during the first quarter of 2023, after a Q4 reading that had been revised downwards from -0.3%. Investors were unhappy with the second consecutive decline, and the Aussie lost ground today. The National Australia Bank responded to the release by warning that a “consumer recession” had arrived.
Due to economic uncertainty, Australians are tightening their purse strings. High inflation and rising rates of interest have caused a cost-of living crisis that has pushed down household spending. Although the new budget might help, inflation must continue to drop before consumers will increase spending.
Australia will release the consumer confidence data for May this Wednesday. Markets are preparing for a drop of 1.7% following a strong gain of 9.4%.
The Federal Reserve has issued a warning that the current turmoil in the financial industry is…