Australia Consumer Sentiment

Actual 9.1%, Previous -6.7%

Release Explanation: This figure measures the level of consumer confidence and is an average of five indexes measuring different aspects of consumer fiscal health. This is one of the few indicators that are entirely expectation based. Confidence figures are often leading indicators for the consumer spending and the economy as a whole. The headline figure is percentage change in the index value from that of the previous month.

Trade Desk Thoughts: The Australian consumer sentiment climbed to 9.1% from the previous months reading of -6.7%, which is the biggest increase in almost 2 years. Australian central bank Governor Glenn Stevens said recently that there is more room to cut rates because the economy is slowing and this will help to ease inflation pressures. Matthew Hassan, an economist from Westpac in Sydney stated “Consumers are feeling relief from a decline in fuel prices and strong indications from the Reserve Bank that rate cuts are ahead.” He also reiterated that, “We are very likely to see an interest-rate reduction in September, providing a clear boost to household finances.”

Forex Technical Reaction: The Australian dollar has become slightly stronger after a stronger than expected consumer sentiment reading.

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