Australian Dollar Perks Up On Business Confidence Rise, Budget Eyed
AUSTRALIAN DOLLAR, NAB BUSINESS CONFIDENCE TALKING POINTS:
- Australian businesses felt better in April
- The NAB barometer also showed assessments of business conditions on the rise
- The Australian Dollar ticked up but the market is focused on tomorrow’s Federal budget
Find out what retail foreign exchange traders think of the Australian Dollar’s chances right now at the DailyFX Sentiment page
The Australian Dollar got a small lift Monday on news of stronger business confidence, but AUD/USD remained in range as investors looked forward to tomorrow’s Australian Federal budget.
National Australia Bank’s Business Confidence Barometer index for April rose to 10, from 8 last time (revised up from 7). Moreover the survey's assessment of ‘business conditions’ soared to 21, from 15 in April. All up this marks a reversal of the declines seen earlier this year and chimes with the Reserve Bank of Australia’ view that the economy is recovering well, aided by loose monetary policy.
AUD/USD rose a little on the news, but with that budget looming Monday was never likely to be a time for big market moves. Treasurer Scott Morrison has warned investors against expecting tax cuts and put his focus instead on balancing the books.
On its daily chart AUD/USD remains under pressure but it has found some relief in the past few days. However there remains a huge disparity in interest-rate expectations between a Federal Reserve still apparently keen to tighten policy and a Reserve Bank of Australia not even expected to even start the process until well into 2019.
AUD/USD has found some support around the key lows of last December, which preceded its climb up to the peaks of February, 2018. However, should that support give way then the lows of last June around 0.7389 would come into focus.
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--- Written by David Cottle, DailyFX Research
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