AUD/USD CONTINUES TO JUGGLE BELOW 0.6800 AHEAD OF US RETAIL SALES

The AUD/USD pair has turned sideways below the round-level resistance of 0.6800 in the Asian session after a juggernaut rally. The Aussie asset is showing a lackluster performance as investors are awaiting the release of the United States Retail Sales data. The reason behind the rally in the Aussie asset was a sheer decline in the US consumer inflation expectations after a more-than-anticipated deceleration in the US Producer Price Index (PPI) report.

S&P500 futures are showing rangebound moves after a perpendicular rally on Thursday, portraying a quiet mood amid the overall risk-appetite theme. The US Dollar Index (DXY) has printed a fresh 11-month low at 100.78 and is expected to extend its downside journey as the odds of the US economy entering into recession are extremely high amid tight credit conditions by US commercial banks after the banking fiasco.

US headline PPI softened heavily to 2.6% vs. the expectations of 3.0% and the former release of 4.6% amid lower gasoline prices. Firms passed on the benefit of lower input costs inspired by lower gasoline bills to end users by offering goods and services at lower prices.

Going forward, the synergic effect of decelerated US PPI and the Consumer Price Index (CPI) will force the Federal Reserve (Fed) to wrap up its policy-tightening spell.

Sheer volatility is expected from the USD Index ahead of the monthly Retail Sales (March) data. The street is anticipating a continuation of contraction in retail demand at a similar pace of 0.4% recorded in February. This could strengthen the requirement of pausing rates sooner by Fed chair Jerome Powell.

On the Australian Dollar front, upbeat Employment data has renewed fears of more rate hikes from the Reserve Bank of Australia (RBA). Investors should be aware that RBA Governor Philip Lowe kept rates unchanged at 3.6% in the April monetary policy meeting.