Talking Points
- AUD/USD seemed to be looking elsewhere as Chinese consumer confidence fell
- The Aussie Dollar had already been hit by weak local building data
- The Chinese numbers didn’t stop it edging back up a little
The Australian Dollar often acts as a liquid and investable proxy for China’s prospects, but seemed pre-occupied with its own affairs on Wednesday as Chinese consumer confidence wilted.
The China Consumer Sentiment Indicator for November from Australian Bank Westpac and research firm MNI hit its lowest point since August at 114.9. The result undercut October’s 117.1 and ended a two-month run of gains. The survey said that consumers’ take on current conditions and future expectations were both hit in a broad-based decline.
Ordinarily this might have been bad news for the Australian Dollar, thanks to Australia’s strong commodity-export links with China. However, the Aussie had already been hit on Wednesday by a woeful set of local building-approval data, and the Chinese numbers failed to make matters any worse for the bulls.
Approvals slumped 12.6% in October. That was the largest fall since September, 2015 and came after a pretty awful 9.3% fall in September.
Those numbers had seen the AUD/USD pair fall from 0.7495 to 0.7477, but the Aussie staged a modest recovery from that level that the Chinese sentiment data did little to derail.
Already under pressure: AUD/USD
Chart compiled using TradingView
--- Written by David Cottle, DailyFX Research
