Over 0.5% Shed as the Week Opens

It is a terrible Easter Monday for the AUD/USD currency pair as it is experiencing what seems to be a bloodbath after it slipped under the low point of the preceding week at 0.7392. The pair has given up over 0.5% in the course of the Asian session, and it is looking ahead at a possibility of more weaknesses as there is a gross poor performance in China’s economic reports. 

AUD/USD price chart. Source TradingView

The National Bureau of Statistics in China has recently given a report on the country’s annual retail sales record at -3.5%. It is a record significantly beneath the speculations of the market at -1.6% and the initial print of it, which was at 6.7%. Australia is one of the leading exporters of metals and other industrial raw materials to China, and any fall in the economic fortunes of China does have serious impacts and implications on the Australian dollar. 

Meanwhile, investors are shaking off the recorded outperformance of some solidity in the Chinese Gross Domestic Product figures. The annual Gross Domestic Product for quarter one of the 2022 fiscal year has come in at 4.8%. It is a lot higher than 4.4%, which was speculated by the market, and higher than the 4% in the previous quarter.

DXY Strength Takes Off Aussie Demand

Whereas the wider strength that the US dollar index has gained has had an effect of dampening the demand that would have surrounded the Australian dollar if it had more strength. On the other hand, the American Treasury bond yield is multiplying when one takes into consideration the increased rate of inflation and a narrower labor market currently contending with the American economic system.

It is said that a consistent full-time employment rate under 4% and a joint effort coming from many decades of consumer price indexes are important for a large interest rate increment by the US Federal Reserve. The ten-year US treasury bond yield has now gained an additional 2.3% in the course of the Asian session as of press time, and it has surpassed the high levels of the past week.

In addition, the expected statement from the Chairman of the US Federal Reserve, Jerome Powell, is the major event for the market to look forward to as the week opens up for new opportunities. In the same manner, investors will be watching out for the publication of the minute from the Reserve Bank of Australia scheduled to be out on Tuesday.