Thanks to some unexpected hawkish comments from RBA Governor Glenn Stevens, the Aussie was able to stage a stellar rally in yesterday’s trading session. The AUDUSD found itself at 0.9177 by the end of the US trading session, almost 150 pips higher from its week open price.
In an interview on the TV show Sunshine, Stevens commented that house prices in Australia are starting to rise to unwanted levels. This gave currency traders a chance to speculate that the bank would hike rates again. He even went on to say that keeping interest rates low for long periods and then suddenly hiking them isn’t really helpful to anyone.
For today, we’ve got the building approvals and the retail sales report at 12:30 am GMT.
The building approvals report, which measures the monthly increase (or decrease) of new building approvals issued by the government, is expected to show a rise of 2.1% in February, opposite the huge 7.0% decline seen the month before.
As for the retail sales report, the expectation is a minor increase of 0.3% for February, a fourth of the gain experienced in January. Since consumer spending makes up more than 70% of a country’s GDP, rising retail sales is generally seen as a leading indicator of economic growth. Better-than-expected results tend to cause an immediate rally in the Aussie.