Australian Dollar Declines on Weak Retail Sales and US Tariff Court Ruling Ahead of US PCE Data

Australian Dollar Logs Losses as Investors Cautious Ahead of US PCE Inflation Data

The Australian Dollar (AUD) slipped against the US Dollar (USD) on Friday, erasing gains from the previous session after disappointing economic data from Australia and renewed uncertainty surrounding US tariffs.

Australian Retail Sales and Building Permits Disappoint

Australia’s Retail Sales declined 0.1% month-over-month (MoM) in April, missing the forecasted rise of 0.3%, signaling soft consumer demand. Additionally, Building Permits dropped 5.7% MoM, contrary to expectations of a 3.1% increase, adding to economic concerns.

US Tariff Legal Battle Adds to Market Uncertainty

Meanwhile, the US Dollar (USD) found support after a Manhattan federal court blocked President Trump’s broad “Liberation Day” tariffs, ruling that the executive orders exceeded constitutional authority. However, the US Court of Appeals temporarily reinstated the tariffs, maintaining tariff-related market jitters.

Market Outlook

With mixed economic data from both Australia and the US and ongoing tariff uncertainty, investors remain cautious ahead of the critical US Personal Consumption Expenditures (PCE) inflation report. The outcome of this report could drive fresh volatility in the AUD/USD pair.

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