- AUD/USD has failed to stick to its fresh yearly high at 0.7540.
- Australian Retail Sales have landed flat but have outperformed the market consensus.
- The DXY is scaling higher gradually on an expectation of a 50 bps interest rate hike.
The AUD/USD pair has attracted some significant offers after failing to stick to its fresh yearly high at 0.7540. The asset is trading lower as the Australian Bureau of Statistics has reported stabled Retail Sales. The monthly Retail Sales for February have landed at 1.8% in line with the previous print but have outperformed the preliminary estimate of 1%.
The aussie has been performing stronger against the greenback this month amid rising commodity prices globally. Australia, being a major exporter of base metals has capitalized upon the recent rally in the base metals, which has helped the antipodean to generate significant cash flows.
Meanwhile, the US dollar index (DXY) is moving toward the north gradually amid rising expectations of a tightening monetary policy by the Federal Reserve (Fed). Betting over a 50 basis point (bps) interest rate hike is gaining momentum after various Fed policymakers cited the requirement of elevating the interest rates to corner the soaring inflation. It is worth noting that Fed Chair Jerome Powell has announced seven interest rate hikes this year and has emphasized that the economy is strong enough to digest the aggressive interest rate elevation.
Going forward, the US Nonfarm Payrolls (NFP) will remain a key driver for the FX domain this week. The street is expecting underperformance from the US NFP as it is likely to land at 475k against the February figure of 678K.