The Australian dollar continued to decline against the US dollar amid growing demand for safe haven assets after a major collapse in the US stock markets. The pressure on the Australian dollar was also caused by the weak fundamental data and the decision of the Reserve Bank of Australia not to change the course of monetary policy, highlighted the risks associated with the high exchange rate of the national currency.

According to the report of the statistical agency, retail sales in Australia for the month of December 2017 decreased after a sharp increase in November. This could negatively impact the results of economic growth for the fourth quarter of the past year.

So, retail sales in December fell by 0.5% compared to November while economists expected a growth of 0.2%. For the fourth quarter of 2017, retail sales grew by 0.9%.

As noted in the report, the main decline in the indicator was due to a sharp decline in sales of home products by 2.6%.

A positive report on growth in the foreign trade deficit also made many investors fix a number of long positions in the Australian dollar before the publication of the RBA's decision on interest rates.

According to the Australian Bureau of Statistics, a foreign trade deficit of 1.358 billion Australian dollars was recorded for the month of December 2017. Economists expected a foreign trade surplus of 200 million Australian dollars. As noted in the report, the deficit growth was due to the sharp import of gold. Exports from Australia increased by 0.2% compared with the previous month, while imports increased by 0.6%.

The Reserve Bank of Australia today put the key interest rate unchanged at 1.50%, stating that the interest rates correspond to the target growth and inflation levels. However, the return to the target inflation range will be slower and more gradual, added the bank.

Австралийский регулятор также ожидает, что низкие ставки поспособствуют дальнейшему сокращению безработицы и ускорению инфляции. The Australian regulator also expects that low rates will help further reduce unemployment and accelerate inflation. It is forecasted that in 2018, annual inflation rates may slightly exceed the threshold of 2%.

Despite all the RBA measures, the outlook for consumer spending remains a source of uncertainty and the additional strengthening of the Australian dollar will put even greater pressure on inflation and economic growth.

As for the technical picture of the AUDUSD pair, it is likely that demand for the Australian dollar will return after the lows of last December have been updated around the level of 0.7800, which coincide with good levels of support. The inability of sellers to push the level of 0.7850 will also testify in favor of buyers. Upward correction, however, will be required in order to form a larger upward trend to the support levels of 0.7735 and 0.7675.