The Australian Dollar was dragged into correction. Overview for 04.06.2020

After updating the highs of January 3rd, AUDUSD is correcting. 

The Australian Dollar is correcting against the USD on Thursday afternoon. The current quote for the instrument is 0.6910.

The statistics published in the morning showed that the Retail Sales in Australia lost 17.7% m/m in May after decreasing by 17.9% m/m the month before and against the same expected reading. It’s quite logical: as long as the country is fighting the coronavirus pandemic along with the others, retail sales in the non-food sector (for example, clothing, footwear, and personal accessory retailing) will go down. 

But not everything is that simple. The food retailing also lost about 17%, while cafes, restaurants and takeaway food services showed -35.4%. It means that the consumption in the country is very much limited, both due to the isolation and business downtime.

The components of the report show that clothing, footwear, and personal accessory retailing lost 53.6%, household goods retailing decreased by 0.1%, other retailing – by 14.4%.

Earlier, Australia reported on the GDP in the first quarter of 2020. The country’s economy lost 0.3% q/q, the same as expected, after adding 0.5% q/q in the previous quarter. On YoY, the indicator added 1.4%. The GDP Capital Expenditure lost 0.8% q/q.     

The Aussie is correcting and this correction would have started no matter what the statistics show – the country’s national currency is too expensive and may add problems for the RBA and the government in their measures to recover the economy.