Aussie Dollar Stays Weak as Retail Sales Drop
The Australian Dollar is under pressure after new data showed that retail sales fell by 0.1% in April. Experts were expecting a small rise, but instead, people spent less. This drop ended three straight months of sales growth.
One reason for the fall was warmer weather, which lowered demand for winter clothes. Also, there weren’t many big sales or discounts in department stores.
Even though interest rates are lower and inflation is easing, people in Australia are still spending carefully. Compared to last year, overall sales are up just 3.8%, which is not a lot, especially with a growing population.
Food, clothing, and department store sales dropped, but household items and dining out saw a small increase—mostly in areas hit by recent floods.
This weak spending could hurt the economy’s growth in the second quarter. The Reserve Bank of Australia (RBA) already cut interest rates to 3.85% in May, and traders think more rate cuts could happen this year to help boost spending.
Impact: The Aussie Dollar might stay weak if shoppers don’t start spending more. More rate cuts from the RBA could possibly come soon to support the economy.