Australia October Retail Sales arrived at +4.9% vs the 2.5% expected for the month which is a big beat. Xmas shoppers and the covid related pent-up demand is a likely contributing factor with the nation easing out of lockdown.
AUD/USD is trying to establish a base following a sharp drop earlier in the session. From an hour perspective, the price fall following a steady decelerating drift to the upside with a perfect touch of the 61.8% ratio:
From a daily perspective, the price could be due for a significant correction from daily lows and back into test the 0.7200 area:
The primary gauge of Australia’s consumer spending, the Retail Sales, is released by the Australian Bureau of Statistics (ABS) about 35 days after the month ends. It accounts for approximately 80% of total retail turnover in the country and, therefore, has a significant bearing on inflation and GDP.
This leading indicator has a direct correlation with inflation and the growth prospects, impacting the Reserve Bank of Australia’s (RBA) interest rates decision and AUD valuation. The stats bureau uses the forward factor method, ensuring that the seasonal factors are not distorted by COVID-19 impacts.
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