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Currencies AUD US Dollar May Find Renewed Vigor in May’s Retail Sales Report

Talking Points:

  • US Dollar Rally May Find New Fuel in May’s Retail Sales Report
  • New Zealand Dollar Soars as RBNZ Signals More Rate Hikes Ahead
  • Australian Dollar Edges Lower on First Jobs Loss in Five Months

A quiet economic calendar in European trading hours puts the spotlight on May’s US Retail Sales report. News-flow from the world’s largest economy has increasingly improved relative to expectations since April, hinting analysts are underestimating the recovery’s vigor and opening the door for upside surprises. That opens the door for a rosy outcome to help bolsters investors’ Fed policy outlook, driving the US Dollar higher. Our long-term fundamental outlook continues to call for a stronger greenback.

The New Zealand Dollar soared overnight in the aftermath of the RBNZ monetary policy announcement. The central bank was widely expected to raise the benchmark rate by 25 basis points to 3.25 percent but buyers seized on rhetoric arguing that “inflationary pressures are expected to increase” as a signal of further tightening to come. The Kiwi rose as much as 1.3 percent on average against its leading counterparts.

The Australian Dollar edged downward after a disappointing set of Employment figures. May’s data set showed the economy unexpectedly lost 4,800 jobs, marking the worst print in five months. Economists were forecasting a 10,000 increase ahead of the release. We continue to hold short AUDUSD.

Asia Session
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European Session
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Critical Levels
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