The Australian dollar is trading lower in today’s trading session as strong US retail sales fuelled speculation of an early interest rate hike.
At 6.43pm (GMT) the Aussie dollar was trading at US77.32c down from US77.53c at close of trade yesterday.
US retail sales hit 1.2 percent in May after coming in at 0,2% in April as consumers gained more confidence, adding pressure to the Fed to tighten monetary policy by way of an interest rate rise.
"The retail sales is just another piece of the economic puzzle and one that investors have been waiting for," said Art Hogan, chief market strategist at Wunderlich Securities in New York.
"The Fed will definitely get one rate hike under its belt this year, and another one next year." He added.
Matt Weller, senior technical analyst at Forex.com, said the report, which showed the retail sales figure increasing for the last 3 months may cause the Fed to use a stronger tone in their next policy statement regarding rates,
"While there's still essentially zero chance that the Fed will act by raising rates next week, it could now look to set the stage for a potential September rate hike with a more hawkish statement next week," he said.