PERTH: The Australian dollar hit a two and a half month low after data showed that the services sector in China continued to expand in June at a slower pace. Traders also exercised caution amid some uncertainty about the outcome of the Greek referendum on Sunday. The currency started falling earlier, following the release of nation’s disappointing retail sales data.
At noon (AEST), the local unit was trading at US75.96 cents, down from US76.34 cents yesterday.
It fell as low as US75.81 cents in earlier trade, its weakest level since April 15.
Official data showed retail spending rose 0.3 per cent in May, which was short of economists’ expectations of a rise of 0.5 per cent.
Considering there was an interest-rate cut early in May and support in the federal budget for small businesses, the figures were disappointing, JP Morgan Australia chief economist Stephen Walters said.
“Department stores were down for the second month in a row, so it was pretty underwhelming given how much underlying support there was,” he said.
OANDA Australia and Asia Pacific senior trader FX Stephen Innes said the retail figures were an additional drag on the Australian dollar.
“The Aussie held up really well in the face of the vulnerability in Europe early in the week,” he said.
“However, we’re seeing it finally succumb to softer domestic and Chinese data and a drop in commodity prices.”
The Australian dollar weakened against the other major currencies in the Asian session on Friday, after data showed that the services sector in China continued to expand in June at a slower pace. Traders also exercised caution amid some uncertainty about the outcome of the Greek referendum on Sunday. The currency started falling earlier, following the release of nation’s disappointing retail sales data.
