The Australian dollar extended losses during the course of the session on Tuesday with weaker retail sales figures, following the closely watched second budget of Prime Minister Malcolm Turnbull and South Korea’s presidential election.
AUD/USD changed hands at 0.7362, down 0.34%, while USD/JPY traded at 113.22, down 0.03%.
The U.S. dollar index, which gauges the dollar’s strength against a basket of major currencies plunged 0.02% to 99.01 at the close of trade.
Meanwhile, the federal budget for the fiscal year starting July 1 was reported just recently, which sent investors to eye on housing policies.
Retail sales for March dropped 0.1% and later inched higher by 0.1% in the first quarter, missing the 0.3% and 0.4% anticipated gains.
In South Korea, markets were closed for the presidential election with opinion polls showing support to Moon Jae-in of the Democratic Party of Korea. It appears that he is seen as a more liberal candidate on both economy and policies dealt with North Korea.
The dollar climbed sharply against a basket of major currencies during the course of the session on Monday, buoyed by a weaker euro as investors took profits in the single currency after proclaiming Emmanuel Macron’s victory in the French presidential election.
Centrist candidate Macron garnered 66% votes against anti-EU candidate Marine Le Pen, marking a landslide margin.
The euro strengthened after Macron won the French presidency, but gains were pared after investors took profits. Moreover, market participants considered the potential uncertainties Macron could be facing as he seeks to implement his economic reform program.
Commodity Prices Slips
The Aussie dollar declined 0.5 percent in a four-month low of $0.7349 after disappointing retail sales, which posted losses around 0.3 percent in March, weaker than the previous month and also missing analysts’ expected gain of 0.1 percent.
It seemed that it has added insult to injury after commodity prices tumbled, following the boot into the currency last week.
Analyst Tom Kennedy labeled the retail report as “unequivocally weak” that added to “the already underwhelming trend in the retail data” and cut the annual rate to a multi-year of 2.2 percent.
In Asian trading, the Aussie dollar is among the worst performer. However, other currencies were also dropping due to the strong US dollar.
The yen also disappointed investors after posting losses of 0.4 percent, while the Swiss franc fell 0.3 percent and the euro by 0.2 percent.
The Aussie dollar will likely continue to drop due to weaker retail sales figures and could dampen optimism as investors focus on the Prime Minister Malcolm Turnbull’s second budget remarks.
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