AUDUSD took another dive on the back of a stronger than expected Retail Sales number released in the US last night. The market was expecting an increase of 0.4% but in May US retail sales figures rose to 0.8%. Unemployment claims also dropped in the US to 218k in May.
Adding more pressure on AUD with recent interest rise in US to 2% from 1.75%. Local banks are being squeezed by higher borrowing costs with the increase of US Fed’s accelerated interest rates hikes. Some Analysts estimated that the spreads paid by Australian Banks could climbed by close to 40bpts and could pressure the Banks in increasing borrower’s interest rates in the near future.
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