Aussie Dollar Retraces Despite Westpac Consumer Confidence Uptick
- Australian consumer confidence ticked up in January
- The Westpac index managed to claw its way out of quite deep negative territory
- However, AUD/USD continued to retrace some of its Trump-inspired gains
The Australian Dollar all-but ignored an uptick in its home country’s consumer confidence on Thursday, with broader themes in play.
The consumer confidence index from Westpac bank rose by 0.1% in January. Looked at on its own that’s obviously no great shakes, but it is a dramatic upsurge from December’s gloomy 3.9% fall. This rise in confidence does tally with other snapshots of the Aussie shopper’s mood in December and early January, but the index remains some way below its recent peak, which came in October.
However, foreign exchange markets all over the world are preoccupied with Donald Trump as his inauguration looms, and with Brexit following UK Prime Minister Theresa May’s speech on the subject Tuesday.
On the same day, Trump said that the US Dollar was too high in an interview with the Wall Street Journal. The greenback duly suffered, with investors wondering whether the Trump era will see an end to the long de facto strong-Dollar policy pursued by successive administrations.
AUD/USD was no small beneficiary of this, rising to its highest level since mid-November 2016 as investors mulled Trump’s remarks. It was retracing some of those gains as Asia/Pacific trade ramped up on Wednesday and the Westpac data could bring no more than a modest pause in that process. The pair was up to 0.75579 after the numbers, from 0.75560 just before, but soon started to slide again.
AUD/USD retraces some of its Trump-related gains:
Chart compiled using TradingView
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--- Written by David Cottle, DailyFX Research
Contact and follow David on Twitter: @DavidCottleFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.