Forex - Aussie slumps as retail sales come in flat, trade deficit widens

Investing.com - The Aussie plunged after weak retail sales and trade data on Thursday with investors now looking for confirmation a deal is on the cards for Greece's debt payments.

Greece inched closer to striking a deal with its creditors on Wednesday, but talks are heading down to the wire.

Australia however started Asia with downbeat news that the trade balance for April widened to an A$3.9 billion deficit, compared to an A$2.250 billion deficit seen year-on-year. Retail sales came in flat, well below the gain of 0.4% expected month-on-month.

AUD/USD traded at 0.7726, down 0.77%, while EUR/USD changed hands at 1.1261, down 0.011. USD/JPY was quoted at 124.54, up 0.23%.

Also, Bank of Japan Governor Haruhiko Kuroda is scheduled to speak later in the day.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.11% to 95.45.

Overnight, the dollar turned lower against a basket of other major currencies on Wednesday, after the release of mixed U.S. economic reports and as positive remarks by European Central Bank President Mario Draghi boosted demand for the single currency.

The Institute of Supply Management said its non-manufacturing purchasing manager's index fell to a 13-month low of 55.7 last month, below forecasts for a reading of 57.0 and down from 57.8 in April.

The report came after payroll processing firm ADP said non-farm private employment rose by 201,000 last month, just above expectations for an increase of 200,000.

Separately, the U.S. Bureau of Economic Analysis said that the trade deficit narrowed to $40.88 billion in April from a revised deficit of $50.57 billion in March. Analysts had expected the U.S. trade deficit to narrow to $44.0 billion in April.

ECB President Mario Draghi said the bank's asset purchase programs will continue until the end of September 2016 and "until the path of inflation is consistent with our aim of achieving inflation rates below, but close to, 2%."

Speaking at the central bank's monthly press conference, Draghi also said that the ECB's asset-buying program is contributing to economic growth and that the full implementation of its monetary policy measures will "provide the necessary support to the euro area economy."

The comments came after the ECB held its benchmark interest rate at a record-low 0.05%, in line with market expectations.