News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
More View more
Australian Dollar Declined as Consumers Grew Weary

Australian Dollar Declined as Consumers Grew Weary

Gary Kerdus,

THE TAKEWAY: Australian consumer confidence waned > Global slowing likely to weigh on sentiment > Australian Dollar declined

The Australian Dollar declined in value versus the U.S. Dollar as Australian consumers feel less confident about their economic future. The Westpac Consumer Confidence Index registered 96.6 in August, down from 99.1 in July marking a 2.5 percent drop in optimism for the month. The index measures family finances from a year ago as well as projected economic conditions over the next one to five years. The last component indicates buyer’s willingness to purchase major household items. A reading below 100 suggests a greater degree of pessimism than optimism.

Although confidence has waned, recent wage data suggests workers have earned slightly more in the second quarter and throughout the year as the Wage Cost Index reports labor earned 3.7 percent more this year compared to last year. However, recent talks of global slowdown may have played a role in the unwillingness to consume as economic uncertainty throughout Europe and China pose substantial risks to the Aussie economy.

During times of economic uncertainty investors have a propensity to hold assets that are less risky like the U.S. Dollar and sell higher yielding investments that carry greater degree of risk like the Australian Dollar. Furthermore, volatility and volume measures have been abnormally low throughout financial markets during August. Often, risk aversion accelerates as volatility increases.

AUD/USD, 1 Minute Chart

Australian_Dollar_Declined_as_Consumers_Grew_Weary_body_Picture_1.png, Australian Dollar Declined as Consumers Grew Weary

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.