Price action in major currency markets has been subdued today, with the exception of the more volatile Australian and Kiwi Dollars which are up about 0.5% and 0.3%, respectively, in trade-weighted terms.
The Australian Dollar received a boost in early Asian trading from the release of strong Australian retail sales data and the Kiwi Dollar seemingly joined the move higher. Australian retail sales growth in November came in twice as strong as expected, at 0.9% mom – the joint fastest rate in almost two years. Retail sales in December may well have been negatively impacted by the spread of wildfires but today’s data point to a strong rebound in consumer spending after two lacklustre months.
At the risk of sounding like a broken record, the Dollar continues to trade in a very narrow range with the market reaction to weaker-than-expected US labour market data pretty modest. Only 145,000 jobs were created in the non-farm sector in December – fewer than expected, particularly after the strong private sector jobs data released on Wednesday. Perhaps of more concern to policy-makers was the fact that hourly earnings growth slowed to a 14-month low of 2.9% yoy.
