Australian retail sales fall
The Australian dollar has trimmed gains against the pound, euro and US dollar, after retail sales and home lending figures came in slightly weaker than markets expected. Foreign exchange rates for the Aussies snapped four days worth of gains against the pound, as risk aversion rose in the market. Retail sales in Australia fell 1% in July while the number of home loan approvals fell by 2%, ending nine months of gains and adding to the view that first home buying has passed its peak.
Retail sales and home loan approvals have been strong in the Australian economy, boosted by AUD20 billion worth of government handouts to stimulate consumer demand. Consumer confidence has also increased to a two year high and this is prompting speculation that the Reserve Bank may opt to begin a tightening cycle of monetary policy before the year is out. Interest rates are expected to stay on hold after tomorrows decision, but economists have predicted we could see a rise from the 3% base rate as early as November.
Foreign exchange rates for the Australian dollar are currently at USD0.8628 and GBP0.5225.
The rates quoted above are interbank rates. Client rates may vary according to the volume and timing of the trade.