The Australian dollar has pulled back today after yesterday’s positive GDP numbers as investors’ expectations of further rate cuts from the RBA surfaced again.

At 8.14pm (GMT) the Aussie dollar was trading at US72.22c after breaking through US73c in yesterday’s trade.

Strong GDP numbers out of Australia yesterday gave traders some hope that the Reserve Bank of Australia may hold back on lifting interest rates but that was all dampened today after a disappointing round of retail sales figures.

Data out today from the Australian Bureau of Statistics showed that retail sales rose 0.2% for the month of April which was well down from the 0.4% seen in March showing a lack of consumer confidence.

The yearly figure hit the market at 3.6%, well down on the decade old average of 4.5 percent.

The disappointing figures are because of a price war at the moment in Australia according to Westpac economist Matthew Hassan,

"The detail suggests price discounting in particular segments was again a factor in April, with a notable 0.2 per cent decline in basic food retail, which includes the major supermarket chains," he said

"Note that the likely presence of aggressive price discounting implies underlying sales volumes and consumer demand are likely not as weak as the nominal sales would ordinarily suggest”.

"The weakness instead says more about prices and retail inflation," he added

The latest unemployment rate and non-farm payrolls figure out of America tomorrow will drive the Aussie dollar as we head into the weekend with a good round of figure expected to apply further pressure.