AUD/USD eyes more weakness despite higher-than-expected monthly Retail Sales data

• AUD/USD is expecting more downside despite better-than-expected Aussie Retail Sales data.
• Aussie monthly Retail Sales figures have landed at 0.6% higher than the expectations of 0.4%.
• Fed Powell will sound hawkish as price pressures are extremely far from the desired rate of 2%.

The AUD/USD pair is expected to slip down to near 0.6400 despite the release of the lower-than-expected monthly Retail Sales data. The economic data has landed at 0.6%, higher than the estimates of 0.4%, but lower than the prior release of 1.3%.

In times, when inflationary pressures are skyrocketing in the Australian economy and the Reserve Bank of Australia (RBA) is continuously tightening its policy, higher Retail Sales data will delight the central bank. Investors should be aware of the fact that the RBA has already raised its Official Cash Rate (OCR) by 2.35%. This month the RBA elevated its OCR by 50 basis points for the fourth time.

Meanwhile, the US dollar index (DXY) is having a ball after the release of upbeat Consumer Confidence data. The US Conference Board reported the sentiment data at 108.0 higher than the prior release of 103.6. The soaring confidence of consumers in the US economy is going to delight the Federal Reserve (Fed) as it is a sign of robust demand by the individuals. This will support the Fed to announce more rate hikes unhesitatingly.

Going forward, the speech from Fed chair Jerome Powell will remain in limelight. Fed policymaker is expected to dictate the likely monetary policy action by the Fed for its scheduled monetary policy which will take place in the first week of November and mid of December. As price pressures have not responded in conjunction with the current pace of hiking interest rates by the Fed, the 'hawkish’ stance will be adopted by Fed’s Powell.