The Australian dollar rose around 0.3 percent to reach a daily high of 0.7150 against the US dollar in early European trading session this Tuesday (9/4). The AUD / NZD currency pair also climbed 0.12 percent to 1.0583. A number of factors pushed the Aussie rally, including the weakening of the US Dollar, rising commodity prices, and improving domestic economic data from the housing sector.

The price of a number of important commodities has increased quite rapidly in the last few days. Crude oil prices skyrocketed to touch a five-month high, between the level of USD64.50 per barrel for WTI and the range of USD71.70 per barrel for Brent. Iron ore prices, Australia's main export commodity, also reached a five-year high on Monday. On the other hand, the US dollar was swayed by uncertainty, after the release of employment data which was rather disappointing at the end of last week. When the news was written, the US Dollar index (DXY) weakened around 0.13 percent to around 96.92. Not yet known for certain reasons behind the current weakening of the US Dollar.

Strengthen Higher Risk Currencies

But, it is clear that its position supports the strengthening of higher risk currencies such as the Aussie. Meanwhile, Australian housing data for February improved. Home Loans increased by 0.2 percent (Month-over-Month), after being recorded at -2.6 percent in January. In fact, previous market expectations predicted that Home Loans would return to -2.0 percent. 

This is a good sign for Australia's economic outlook, which was previously feared to be dragged down by property price deflation in some of its largest cities such as Melbourne and Sydney. In the next few days, the movement of the AUD / USD currency pair is likely to be determined by the momentum of the US Dollar. 

Because, there are only a handful of schedules to release low-impact data from domestic Kangaroos, including the Westpac consumer sentiment index, speeches by Australian central bank officials, and a review of RBA's financial stability. In addition, market participants will also have ears to anticipate the latest developments in US-China trade negotiations and changes in commodity prices. As one of the export-based countries, the outlook for the Australian economy is strongly influenced by these issues.

Australian Retail Sales Rise Significantly, AUD / USD Soar

Australian Retail Sales in February surged past expectations. This also encouraged the strengthening of the Australian Dollar against the US Dollar. The Australian Statistics Department released Retail Sales data which rose significantly during February, pushing the AUD / USD currency pair higher in the Asian trading session this morning.

Data published by Australian Bureau of Statistics (ABS) showed that Kangguru's Retail City Sales jumped 0.8 percent MoM in February, becoming the biggest monthly increase since November 2017. The 0.8 percent figure far exceeded the expectations of previous economists who predicted a 0.3 percent increase. The 0.8 percent yield was also far better than the January figure which only reached 0.1 percent.

The shocking February Retail Sales helped boost annual growth by 3.2% YoY (Year-over-Year), which was the biggest annual gain since October last year. Retail sales are reported to increase in all states except Tasmania. The increase also occurred in New South Wales and Victoria, areas where house prices have experienced a sharp decline over the past year.

Will Be Welcomed With Excitement 

The surge in Australian retail sales in February is believed to be economically welcomed by the Central Bank of Australia, because it contributes to household expenditure which has been considered still trapped in weakening territory. In addition, a separate report also showed new car sales posted a 5.6 percent increase in March, referring to VFACTS data.