Australia's retail sales suffer setback in July

Australian retail sales suffered a surprising spill in July, as consumers shunned department stores after two months of strong spending, denting the local dollar and narrowing market odds for another cut in interest rates. The Australian dollar dipped a fifth of a cent to $1.0240 after government figures showed retail sales fell 0.8 percent in July, from June when they jumped an upwardly revised 1.2 percent.
The fall was the largest since October 2010 and well short of forecasts of a 0.2 percent increase. Much of the weakness came in department stores where sales fell a steep 10.2 percent, the largest drop in seven years, after government handouts boosted spending in May and June. The Reserve Bank of Australia (RBA) holds its September policy meeting on Tuesday and is widely expected to hold rates at 3.5 percent.