Dollar holds gains above US76c

The local unit was trading higher ahead of the Bank of England’s policy meeting.

The Australian dollar was higher in late afternoon deals, after traders largely dismissed weak retail spending numbers.

At 6.07pm (AEST) on Thursday, the local unit was trading at US76.18 cents, up from US75.88c on Wednesday.

Retail spending rose 0.1 per cent in June, below market expectations of a lift of 0.3 per cent, and annual growth of 2.8 per cent was the slowest pace in three years.

JP Morgan head of FX strategy Sally Auld said the headline figures were negative, but the details showed that was due to lower prices driven by competition rather than a lack of consumer demand.

“It doesn’t mean people are buying less, it means prices are lower,” she said. “Food prices are particularly low due to a very competitive supermarket sector. If you take food out, discretionary retail spending was decent.”

Looking ahead, the Bank of England is widely expected to cut interest rates at its August meeting on Thursday night, Australian time and key US employment figures are due on Friday.

AAP