Australian January Retail Sales arrived +1.8% for the month vs a Reuters poll of +0.4%.

AUD/USD update

The price did not move on the data, instead is being driven by external factors. AUD/USD has been in a range of between 0.7157 and 0.7189 at the start of the week, recovering from a large opening gap and now idles the 0.7180s. However, the path of least resistance could be to the downside, as illustrated here:

• AUD/USD Price Analysis: A trip into the 0.7090's could be on the cards

About Retail Sales

The primary gauge of Australia’s consumer spending, the Retail Sales, is released by the Australian Bureau of Statistics (ABS) about 35 days after the month ends. It accounts for approximately 80% of total retail turnover in the country and, therefore, has a significant bearing on inflation and GDP.

This leading indicator has a direct correlation with inflation and the growth prospects, impacting the Reserve Bank of Australia’s (RBA) interest rates decision and AUD valuation. The stats bureau uses the forward factor method, ensuring that the seasonal factors are not distorted by COVID-19 impacts.