FX.co ★ Aussie Dollar Attempts Rebound After 5-Day Decline

On Thursday, the Australian dollar appreciated to over $0.645, making an effort to recover from a loss of over 1% the previous day and to break a five-day losing streak. This improvement was buoyed by positive economic indicators, foremost among them a 1.2% rise in retail sales for June, marking the strongest monthly increase since March 2022, and significantly surpassing the anticipated 0.4% growth. Meanwhile, building approvals experienced an 11.9% surge, representing the most substantial growth since May 2023, marking the second consecutive month of expansion. Nevertheless, the Australian dollar continues to face challenges due to a cautiously dovish stance from the Reserve Bank of Australia. RBA Deputy Governor Hauser acknowledged that the Q2 inflation data was "very welcome" and consistent with expectations but stressed that the central bank remains vigilant and reliant on data. With inflation declining to its lowest point in four years and unemployment climbing to 4.3%, markets are now anticipating a 95% probability of a rate cut on August 12. In addition, China's factory activity contracted more than anticipated, exerting additional pressure on the Australian dollar, given its status as a Chinese economic proxy currency.