- AUD/USD is looking to stabilize above 0.6760 for further gains.
- The US dollar is showing subdued performance as overall market sentiment is extremely bullish.
- Australian retail sales data is expected to fall to 0.3%, down from the previous release of 0.6%.
The AUD/USD pair shows a lackluster performance in the Asian session amid calm market sentiment. The Aussie asset managed to regain the 0.6760 mark after a minor sell-off at the start of Tokyo. Volatility has been depressed dramatically in the currency market as trading activity is low in the United States due to Thanksgiving Day.
Meanwhile, the US dollar is showing subdued performance in the Tokyo session after a wild move in early trading. The US dollar turned sideways economic calendar has nothing to offer. As the odds of a slower rate hike from the Federal Reserve (Fed) strengthened, alpha generated by the US Treasury bonds is under the list of sellers of investors. U.S. 10-year Treasury yields extended their losses to nearly 3.66%.
Investors have been pouring funds into US Treasuries and risk-sensitive assets in anticipation that the Fed’s move to lower rate hikes at its December policy meeting will boost economic projections. The dictates of the Federal Open Market Committee (FOMC) have already confirmed that a slowdown in the pace of rate hikes is necessary to reduce financial risks.
On the Australian dollar front, investors are focused on the release of retail sales data. Economic data is expected to fall to 0.3% from the previous release of 0.6% on a monthly basis. A fall in consumer demand would please the Reserve Bank of Australia (RBA) as lower retail sales will force manufacturers to cut prices to spur demand. This may result in a future decline in inflation.