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Aussie dlr takes a pause, awaits retail sales data
Wednesday July 1, 11:51 AM
SYDNEY, July 1 (Reuters) - The Australian dollar slipped from two-week highs on Wednesday, taking a breather from its best quarterly performance in more than two decades, while awaiting key data which could give clues about interest rates.
* May retail sales and buildings approvals are due at 11.30 a.m (0130 GMT). Analysts expect retail sales to rise 0.5 percent from a month earlier, while building approvals are expected to jump 3.3 percent. [AU/ECI].
* Upbeat data could add to speculation that the cash rate may have hit a bottom at 3 percent, well above those in other developed nations. This could provide the Aussie some support.
* By 9:35 a.m. (2335 GMT), the Aussie AUD=D4 was at $0.8067, down from $0.8136 late here on Tuesday. It rose to as high as $0.8156 on Tuesday, its highest since June 12, having gained more than 16 percent in the April-June quarter.
* The Aussie retreated offshore after a disappointing U.S. consumer confidence report for June hurt demand for riskier assets and sent stocks, commodities and higher-yielding currencies lower.
* The Aussie slipped against the yen AUDJPY=R, dropping to 77.62 yen from 77.86 yen late here on Tuesday as demand for leveraged trades eased amid doubts over an economic recovery.
* Australian bond futures were marginally lower ahead of the retail sales data, having gained little direction from U.S. Treasuries. [US/] Three-year bond futures YTTc1 were 0.01 points lower at 95.24, while ten-year bond futures YTCc1 were down by 0.015 points at 94.485.
* Still, local 10-year cash yields remained a sizable 210 basis points over U.S. yields, near the widest spread in 11 months, on a view official rates here will rise before those in the United States. (Reporting by Anirban Nag; Editing by Wayne Cole)
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