Weekly Roundup: Australian dollar declines as sentiment sours
Philip McHugh May 30th 2023 - < 1 minute read
The risk-sensitive Australian dollar weakened over the course of last week’s trade, as the US debt ceiling deadlock contributed to a souring market mood.
Gloomy PMI data early in the week also pressured AUD. The Australian services sector slowed more than expected while the contraction in the country’s manufacturing sector continued.
A modest recovery in risk appetite prevented further losses on Friday, despite Australia’s latest retail sales data unexpectedly showing that activity stalled last month.
The ‘Aussie’ is attempting a recovery this week amid an improving market mood. However, investors remain cautious, which is severely capping AUD’s upside.
Australia’s monthly CPI indicator could lift the currency midweek. Economists expect a slight uptick in inflation in April, which may prompt investors to readjust their monetary policy expectations for the Reserve Bank of Australia (RBA).