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    Australian dollar faces test

    The Australian dollar is trading lower today after lower than expected local data once again fueled expectations for a rate cut from the RBA.

    At 6.56pm (GMT) the Aussie dollar was trading at US76.18c down 0.79 percent from yesterday’s trade.

    The Australian bureau of statistics reported earlier today the latest retail sales figures at 0.0 percent against analysts’ expectations of a 0.4 percent rise and well down on last month’s 0.3 percent figure.  

    Reduced spending hits all parts of the economy including inflation and may force the Reserve Bank of Australia to cut rates.

    The disappointing figures add more importance to tomorrow’s RBA interest rate decision where a rate reduction is definitely not out of the question.

    Even if the central bank decides to keep rates on hold they are most likely to talk down the currency which may be enough to the stop the recent rise of the Australian dollar.

    Also from Australia tomorrow will see import, export and trade balance figures which may show if the recent jump in price of Iron ore, Australia’a biggest export is filtering into the economy.

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