THERE'S SIGNS THAT CHRISTMAS WAS NOT SO CHEERY FOR AUSTRALIAN RETAILERS, AS OFFICIAL FIGURES REVEAL AN UNEXPECTED DROP IN SALES IN DECEMBER. RETAIL TURNOVER FELL POINT-TWO PER CENT.

CAFES AND RESTAURANT FELT THE PINCH ... AND SO TOO DID SHOPS SELLING HOUSEHOLD GOODS, NEWSPAPERS AND BOOKS. ANALYSTS BELIEVE ITS A DISAPPOINTING READING FOR RETAILERS AND THE ECONOMY.

THE DOLLAR SANK LOWER AS THE RETAIL FIGURES DO INCREASE THE CHANCES OF AN INTERST RATE CUT. THE DOLLAR FELL BELOW 104 YESTERDAY AFTER THE RBA LEFT INTEREST RATES ON HOLD YESTERDAY BUT INDICATED ITS LOOKING TO EASE POLICY SOON IF THE ECONOMY REQUIRES. ITS NOW AT 103 AND A HALF. THAT'S A THREE MONTH LOW.

THE SHARE MARKET FINISHED HIGHER THOUGH... THE ASX 200 ADDED PONT-EIGHT PER CENT, THAT WAS DRIVEN BY ENERGY BANK AND RETAIL STOCKS.

LOOKING ACROSS THE REGION... NIKKEI LEADING UP THREE PER CENT BOOSTED BY NEWS THAT THE BANK OF JAPAN GOVERNOR IS RETIRING EARLY... INCREASING THE CHANCES OF DRAMATIC POLICY CHANGE, OVERNIGHT WALL STREET RECOVERED MUCH OF YESTERDAY'S LOSSES AS COMPANIES REPORTED SOLID EARNINGS. THE DOW PUT ON POINT-SEVEN PER CENT.