- AUD/USD keeps gains after China’s status quo rate decision.
- Australia’s retail sales fell by 17.9% in April to register the biggest drop on record.
- The Aussie dollar, however, remains bid, as the RBA skips bond purchases.
AUD/USD is better bid above 0.6550 at press time and is looking to cut through the resistance of the trendline falling from April 30 and May 11 highs.
The People’s Bank of China (PBOC) kept the one-year and five-year loan prime rate unchanged at 3.85% and 4.65%, respectively. The status quo rate decision was expected and is having little impact on the China-sensitive Aussie dollar.
Alongside the PBOC’s rate decision, Australia reported a 17.9% month-on-month decline in retail sales in April. That is the biggest seasonally adjusted decline ever. So far, however, the Aussie dollar has ignored the dismal data.
The pair is currently trading at session highs near 0.6650, representing a 0.40% gain on the day. The spot has added nearly 10 pips since the PBOC rate decision and the release of Australia’s preliminary retail sales figure.
Aussie dollar is drawing bids, possibly due to Reserve Bank of Australia’s (RBA) decision to skip government bond purchases. The central bank hasn’t purchased bonds under its quantitative easing program since May 6. That makes the RBA relatively hawkish compared to its global peers.
The AUD, therefore, could continue to gain altitude during the day ahead. The ascent may halt and the currency could face some selling pressure if the risk sentiment weakens. That possibility cannot be ruled out, as scientists have raised questions regarding the authenticity of Moderna’s positive test of the coronavirus vaccine. At press time, the futures on the S&P 500 are up 0.54%.
Technical levels
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