Australian Consumer Confidence Declines, AUD/USD Flat
The Australian Dollar remained flat against the US Dollar as Australian consumer confidence declined 0.1% over last month. The Westpac Consumer Confidence Index printed 102.1 and remained above the sentiment balance mark of 100. The index averages responses to survey questions related to consumer family finances and economic outlook and serves as a benchmark for measuring consumer sentiment.
This data seemed to have relatively little impact on AUD/USD. However, Credit Suisse’s measurement of market priced-in outlook declined 1% after the report, showing investors now expect a 57% chance of a rate cut at the next Reserve Bank of Australia meeting. A reduced rate by the RBA to support economic growth could move the pair lower. The RBA has reduced its rate three times in the last 12 months.
Investors are likely looking towards the release of the Federal Open Market Committee’s June meeting minutes scheduled for tomorrow at 18:00 GMT and Federal Reserve Chairman Bernanke’s speech at 20:10 GMT to derive their expectations on the Fed’s timetable for reductions in quantitative easing. A dovish tone from the Fed could fuel investor risk appetite, pushing the pair higher whereas a hawkish one could lead investors to further unwind carry trades, weighing on AUD/USD.
AUD/USD (5-Minute Chart)
Source: FXCM Marketscope
Jimmy Yang, DailyFX Research Team