FX.co ★ Australian Dollar Falls on Weak Data

The Australian dollar declined to approximately $0.642 on Friday and appeared set to conclude the week with a decrease of over 1%. This downturn was largely due to a series of disheartening domestic economic reports that negatively impacted investor confidence. Notably, retail sales unexpectedly dropped by 0.1% in April compared to the previous month, countering the 0.3% increase observed in March, which had aligned with forecasts. Furthermore, building permits also underperformed expectations, exacerbating concerns about a potential downturn in economic health. These factors have heightened the anticipation that the Reserve Bank of Australia will continue its easing strategy following last week’s announcement of a 25 basis point interest rate cut. Policymakers have pointed to increasing downside risks stemming from the US-China trade conflict and declining inflation as pivotal reasons for their cautious approach. Additionally, the Australian dollar faced further pressure after a US appeals court reinstated President Donald Trump's reciprocal tariffs, overturning a prior federal ruling that had deemed them illegal.