Australian dollar down on consumer confidence

The Australian dollar is trading lower today after a release of weak local data that showed consumer confidence is beginning to wane. At 3.24pm (AEDT) the Aussie dollar was trading at US76.02c down from US76.21c in yesterday’s trading. The latest Westpac consumer confidence survey hit the market earlier today at 99.1, down from 102.2 last month, with a number less than 100 showing more pessimists than optimists. Many attribute the fall to the recent close election in Australia which nearly resulted in a hung parliament as well as the fallout from Brexit which sent shockwaves through the world economy. “Respondents would have been particularly unnerved about the prospect of an inconclusive election result given the experience during the last hung parliament in 2010 to 2013,” noted Westpac’s chief economist Bill Evans. “Since the end of the survey period we have seen some welcome political certainty with the prospect of a hung parliament avoided “he added. Mr. Evans also mentioned that Brexit was a contributing factor in consumer weakness but expects confidence to bounce back next month, “By the time of the survey market volatility associated with ‘Brexit’ had largely settled down and media commentary was, correctly in my view, concentrating on the implications for the UK economy rather than the initial reaction which speculated on some disastrous contagion for the whole of Europe” said Evans. “With the index currently poised only slightly below 100, we can be reasonably confident that the Index will be back above 100 next month, despite having to negotiate two major shocks in ‘Brexit’ and election uncertainty,” he added.

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