The Australian dollar is up slightly in the Thursday session. Currently, the pair is trading at 0.7608, up 0.21% on the day. AUD/USD fell to a low of 0.7531 in the Asian session, its lowest level this year.
Australia Retail Sales slip
Australia’s retail sales fell 0.8% in February, but this was an improvement over the preliminary read of -1.1%. The decline is a concern, with the economy in recovery mode from the Covid pandemic. If Retail Sales rebounds in March, all will be forgiven. However, a second straight decline in consumer spending would raise some alarms and could weigh on the Australian dollar.
Will US Nonfarm Payrolls outperform?
The ADP Employment report for February came in at 517 thousand, shy of the estimate of 552 thousand but a huge rise from the previous read of 117 thousand. This marked a six-month high. Although the ADP release is not considered a reliable indicator for the official nonfarm payrolls report on Friday (12:30 GMT), optimism is running high. The street consensus stands at 652 thousand, which would be a sharp rise from the January read of 379 thousand. However, given the impressive US recovery and an aggressive vaccine rollout, NFP could outperform by a wide margin. Barclays Bank sent a note stating it expects to see a gain of 900 thousand new jobs, and some analysts are predicting a gain above the one-million mark. If NFP is unexpectedly strong, we can expect some volatility from AUD/USD on Friday.
The US unemployment rate is expected to drop from 6.2% to 6.0%, while wage growth, which has posted two weak gains of 0.2% in 2021, is expected to edge lower to 0.1%.
AUD/USD Technical
- AUD/USD faces resistance at 0.7744. Above, there is resistance at 0.7848
- 0.7550 is the first line of support. It is followed by support at 0.7460
