On Monday, the AUD/USD pair traded lower due to a sell-off in the AUD caused by the worse than expected retail sales figures in Australia. The Aussie's February retail sales came in flat on a monthly basis, expectations being of a 0.4% rise month-on-month after a 0.3% monthly rise in the month of January. The impact of the retail sales miss was compensated by the building approvals in February, which came out 3.3% up on a monthly basis with an expected 2.0% rise and a previous of -6.6% (revised from -7.5%). On Tuesday, RBA (Reserve Bank of Australia) announced that the official interest rate will be left unchanged at 2% for the time being. The meeting emphasized the presence of a strong basis for the economy to grow on, the inflation being close to the target, the monetary policy being therefore considered appropriately in the current setting.
For what regards the cable, we can see that it went down yesterday and pushed the GBP/USD major in the 1.4150 area, reaching close to the lower border of the wide range of 1.4050 – 1.4500 where the cable oscillated in the past month. Monday's strong advance around the 1.4320/25 handle was cancelled yesterday as the demand for the greenback grew, although the UK Service PMI (Purchasing Managers' Index) printed higher than expected and over February's figure. Across the board, the GBP is following the same trend as the “Brexit” jitters have a meaningful impact on the investors' sentiment.
The EUR/USD major went down and posted fresh daily lows yesterday as the greenback sentiment went up in light of better than expected ISM (Institute of Supply Management) non-manufacturing figures. The pair resumed its downward trend yesterday posting new daily lows, with the spot hitting 1.1335 before breaking the support and recording over a 0.35% loss for the day. For what regards the ISM non-manufacturing PMI, the figure went up to 54.5 for March from a previous reading of 53.4 in February and over the expected 54.0. In the same time, the Markit service index is showing an improvement in this sector of the economy, the index going up to 51.3 versus an expected 51.0.
