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AUD slips as markets look to retail sales, Federal budget

The Australian dollar was mostly weaker overnight as markets turned more cautious ahead of today’s retail sales number.

Additionally, the US dollar staged a comeback overnight after Friday’s employment-inspired selldown.

Last week’s US non-farm payrolls were below expectations but, more broadly, the US has been much stronger over the last month.

The AUDUSD was down 0.3% overnight as the pair neared 11-month lows.

Aussie turns

The Aussie weakness was reflected in other key markets.

The AUD fell from levels close to two-month highs versus the euro and New Zealand dollar and fell from three-month highs versus the Swiss franc.

The Aussie’s losses were near significant market levels that could signal further potential losses ahead.

Retail sales, Federal budget

A busy calendar of market events could drive volatility over the next 24 hours.

The major event will be Australian retail sales for March. The market is looking for a 0.2% increase. Last month’s numbers were stronger than expected. Retail sales are due at 11.30am AEST.

Later, US Federal Reserve chair Jerome Powell presents a major speech at 5.15pm.

The Australian government announces its 2018-19 budget tonight at 7.30pm.

Typically, the Federal budget has little effect on the Australian dollar, but potential tax cuts could raise the chances of an RBA rate hike sooner rather than later. If so, the AUD could see small gains.

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