On May 30, Aussie retail sales figures will put the Australian economy and AUD/USD center stage. Economists expect retail sales to rise 0.3% month-on-month in April, matching March’s increase.
Higher spending may fuel demand-driven inflation, potentially tempering bets on multiple RBA rate cuts. A less dovish RBA stance might send AUD/USD toward $0.65. However, a softer reading could fuel speculation about multiple rate cuts, pushing the pair toward $0.64.
RBA Governor Michele Bullock raised concerns about lackluster household spending during the monetary policy press conference, stating:
“RBA expects lower rates and rising wages to boost household consumption. But spending has not picked up as much as expected… The Australian labor market and household spending remain the most significant domestic risks.”
Aussie Dollar Daily Outlook: US Inflation and the Fed Rate Path
Later today, US inflation data will influence US-Aussie interest rate differentials and AUD/USD. Hotter inflation would likely widen the US-Aussie interest rate differential in favor of the US dollar. A wider differential could send AUD/USD below the 200-day EMA and expose the $0.63623 support level.
Conversely, softer inflation may narrow the rate differential and push AUD/USD toward $0.65370
Beyond the data, trade developments will continue to drive price volatility. On May 23, AUD/USD soared from $0.64069 to $0.65370 following Trump’s EU tariff threats. However, a delay to EU tariffs left the pair below $0.64500 on May 27.
