AUD/USD Drops: Key Levels to Watch as Consumer Confidence Rises
2024.11.12 08:54
The has posted sharp losses on Tuesday. In the European session, The AUD/USD pair is trading at 0.6544, down 0.44% on the day.
Australian Consumer, Business Sentiment Accelerates
Australian businesses and consumers are showing improved confidence. The National Bank Business Confidence index for October rose to 55, up from -2 in September and its highest level since January 2023. The Westpac consumer confidence index climbed 5.3% to 94.6 in November, up from 89.8 in October. This was the highest level in over two years.
The positive confidence numbers indicate that businesses and consumers are more confident about the economic outlook, as expectations grow for a rate cut from the Reserve Bank of Australia, which on Dec. 10. Australia releases the October employment report on Thursday and the release could be a significant factor as to whether the central bank continues to hold rates or delivers an initial rate cut. Australian inflation has fallen to 2.8%, within the RBA’s target of 1% to 3%.
Australia releases on Wednesday. Wages are expected to ease to 3.6% y/y in the second quarter, down from 4.1% in Q1. Wage inflation has been a driver of services inflation which rose to 4.5% in the second quarter, up from 4.3% in Q1. RBA policymakers are hesitant to start lowering rates until services inflation loses some steam and heads lower.
In the US, there are no major events on the calendar but investors will be listening closely as a number of FOMC members make public remarks. The is expected to continue to trim , with a 25-basis point cut the most likely scenario at the December meeting.
AUD/USD Technical
- AUD/USD has pushed below support at 0.6559 and is testing support at 0.6544. Below, there is support at 0.6524
- There is resistance at 0.6579 and 0.6594
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