Australian Dollar (AUD) Exchange Rate Holding Gains ahead of Employment Figures
On Wednesday the Australian Dollar was holding steady against the Euro, British Pound and US Dollar as the Westpac consumer confidence index showed a modest improvement.
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The gauge plummeted in May in response to Australia’s rather severe national budget but appears to have stabilised slightly.
The index shed 6.8 per cent last month but has eked out a 0.2 per cent increase this month.
This took the measure from 92.9 to 93.2 .
While this was an improvement of sorts, it shows that sentiment is still down on average levels.
According to Westpac economist Matthew Hassan; ‘Sentiment has stabilised after registering a sharp fall in the wake of the Federal Budget last month. The index is still pessimistic territory however, down 6.6 per cent from its pre-budget level in April and 15.6 per cent below its post-election high in November last year.’
Sterling did manage to recover some ground over the course of the European session however as the UK’s unemployment rate fell beyond a five-year low in the three months to April, adding to interest rate hike speculation.
The GBP/AUD pairing moved from a high of 1.7887 to a low of 1.7831.
During Australasian trading the GBP/AUD exchange rate could experience extensive additional movement.
The week’s biggest Australian report, the nation’s employment figures are due out at 2:30 GMT.
The data has been forecast to show that Australia’s participation rate held at 64.7 per cent in May and that the nation added 10,000 positions.
As the Australian economy added 14,200 positions in April this lacklustre result would take the unemployment rate to 5.9 per cent, up from 5.8 per cent.
A report of this kind would support the argument for the Reserve Bank of Australia holding interest rates at their current levels for the foreseeable future.
Australia’s credit card balances/purchases figures may also be worth noting.
The Australian Dollar is currently trading against the US Dollar in the region of 0.9388 and trading against the British Pound in the region of 0.5595.