The Australian data releases came this morning showing that the January Retail Sales +0.5% missed expectation of a Reuters poll +0.6% month on month and that the Australia Jan balance goods and services arrived at A$+10,142 mln vs a Reuter’s poll of A$+6,500 mln. Exports +6 pct MoM and at Imports -2 pct MoM.
The Aussie data is being watched carefully as the forex investors outs their bets on the commodity complex to outperform in a reflation trade environment.
Reuters writes that ”emerging market currencies of commodity-exporting nations are set to firm over the next 12 months as the world recovers from the coronavirus pandemic – and despite recent rises in US Treasury yields, a Reuters poll found on Thursday.”
”High-beta emerging market currencies, which last year achieved their best year since 2017 with gains of over 3%, have been in question after the benchmark 10-year US Treasury yield hit a one-year high last week.”
”Still, as investors ponder whether the world is entering a commodities cyclical upturn or a new supercycle, commodity-linked currencies are already firmer due to expectations of a boom.”
”Currencies of historically strong commodity exporters will trade resiliently.”
Technically, the Aussie pair is battling to expand gains beyond the 0.7800 price line, neutral in the near-term. The 4-hour chart shows that it´s trading between directionless moving averages, while the Momentum indicator retreats within positive levels, and the RSI consolidates around 47. Additional gains are expected on a possible break above the 0.7837 price, the weekly high.
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