The Australian currency dropped today on Forex as the government bonds rose after the report on the April retail sales showed a decline of this important indicator.
The retail sales in Australia slid down 0.2 percent in April, forming a steady downward monthly trend for the growth macroeconomical indicator. A decline in retail sales is now attributed to the extremely tight monetary policy in Australia, spurring belief that the record high interest rate (7.25 percent) will be probably lowered soon.
While expectation for the Australias interest rates are directed down, the U.S. dollar may gain from the rate increase in the medium-term perspective. The end of the RBAs increasing cycle will be a strong reason for many traders to start selling the Australian dollar.
AUD/USD declined today from 0.9546 to 0.9521 as of 8:21 GMT with a daily minimum at 0.9501. AUD/JPY dropped to 99.84 from its open price at 100.48; the daily low for this currency pair was at 99.76.
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