• AUD/USD drops slightly to near 0.6645 after surprisingly weak Chinese Retail Sales and Industrial Production data.
• The Australian Dollar started correcting last week after poor employment data.
• The US Dollar holds onto dovish Fed bets-driven losses ahead of US NFP data.

The AUD/USD pair trades 0.10% lower to near 0.6645 during the Asian trading session on Monday. The Aussie pair is under pressure as the National Bureau of Statistics of China has reported unexpectedly weak Chinese Retail Sales and Industrial Production data for November.

The impact of a dramatic change in Chinese domestic data remains significant on the Australian Dollar (AUD), given the higher dependence of the Australian economy on its exports to Beijing.

China’s Retail Sales grew by 1.3% on an annualized basis in November, while they were anticipated to rise steadily by 2.9%. The Industrial Production data came in at 4.8%, down from 4.9% in October. Economists anticipated the factory data to have risen by 5%.

The Australian Dollar has been correcting over the last two trading days, following the release of the weak labour market data for November. The data on Thursday showed that the economy shed 21.3K jobs in November, while it was expected to have added 20K fresh workers, raising concerns over the labor market strength.

Meanwhile, the broader outlook of the Aussie pair remains firm as the US Dollar (USD) struggles to regain ground amid hopes that the Federal Reserve (Fed) will deliver more interest rate cuts in 2026 than it had projected in last week’s policy meeting. In the policy announcement on Wednesday, the Fed’s dot plot showed that policymakers collectively see the Federal Fund Rate falling to 3.4% by the end of 2026, indicating that there will be only one interest rate cut next year.

This week, the major trigger for the US Dollar will be the United States (US) Nonfarm Payrolls (NFP) data for November, which will be released on Tuesday.