AUD/USD remains confined below 0.6670 despite upbeat Australian Retail Sales data

• AUD/USD in inside the woods, oscillating in a 10-pip range despite upbeat Australian Retail Sales data.
• Monthly Aussie Retail Sales have accelerated by 0.4%, higher than the consensus and the former release of 0.2%.
• The USD Index has extended its correction to near 101.79 despite the Fed is expected to raise interest rates further by 25 bps.

The AUD/USD pair has continued its sideways performance in a range of 0.6660-0.6670 despite the Australian Bureau of Statistics has reported an upbeat Retail Sales data (March). Monthly Retail Sales have accelerated by 0.4%, higher than the consensus and the former release of 0.2%. Resilience in consumer spending indicates that the decision of hiking interest rates further by the Reserve Bank of Australia (RBA) was correct.

On Tuesday, the Reserve Bank of Australia hikes its Official Cash Rate (OCR) surprisingly by 25 basis points (bps) and pushed it to 3.85%. The street was anticipating a continuation of neutral policy by RBA Governor Philip Lowe as inflationary pressures are consistently declining for the past three months.

However, the RBA believed that the current monetary policy is not restrictive enough to achieve the agenda of price stability.

Going forward, investors will shift their focus on Australian Trade Balance (March) data, which will release on Thursday. Monthly Trade Balance data is seen declining 12,750M from the former release of 13,870M. A weaker-than-anticipated Trade Balance data would impact the Australian Dollar.

Meanwhile, S&P500 futures are showing some gains in the Asian session, portraying a minor recovery in the risk appetite of the market participants. US equities were heavily dumped on Tuesday amid fears of recession and rising concerns over the debt ceiling.

The US Dollar Index (DXY) has extended its correction further to near 101.79 despite the Federal Reserve (Fed) is expected to raise interest rates further by 25 bps above 5%. The USD Index is impacted by the commentary from Heather Boushey, a member of the Council of US Economic Advisers. US Boushey said that interest rate hikes from the Fed were having a negative impact on the banking sector, as reported by Reuters.