The Australian Dollar has strengthened against most of its major peers after a gauge of consumer confidence soared to two-year high, lessening expectations that the nation’s Central Bank will make cuts to interest rates.
The currency rebounded from a four-month low as traders reduced their bets that the Reserve Bank of Australia will lower the overnight cash rate from 3% in March. The Consumer confidence survey published by Westpac Banking Corp and the Melbourne Institute showed that consumer sentiment has risen by 7.7% in January, rising to its highest reading since December 2010. Economists said the combination of falling interest rates, a 7.6% rise in Australian share prices since Jan. 1, and a tentative sign of recovery in house prices has lifted confidence.
“The more positive February reading suggests lower interest rates may finally be starting to gain more traction with the consumer,” said Westpac chief economist Bill Evans in a statement.
Thanks to the positive data the financial markets are now predicting that a possible further interest rate cut could happen in May rather than the previously predicted March. Last week the RBA left the rate unchanged at 3%, citing a lessening in the number of global threats and signs that the economy was improving.
Despite the improving picture, The ‘Aussie’ remains at risk of renewed weakness as Japanese and speculative traders continue to lighten their exposure to the currency. If the currency slips further then it could attract the attention of bargain hunters which is likely to see it return to a run of rises.
Current AUD Exchange Rates
The Australian Dollar to Euro exchange rate is currently trading at 0.7670
The Australian Dollar to US Dollar exchange rate is currently trading at 1.0343
The Australian Dollar to Pound Sterling exchange rate is currently trading at 0.6609
The Australian Dollar to New Zealand Dollar exchange rate is currently trading at 1.2285
The Australian Dollar to Canadian Dollar exchange rate is currently trading at 1.0373
The Australian Dollar to Emirati Dirham exchange rate is currently trading at 3.7987
The Australian Dollar to Swiss Franc is currently trading at 0.9487
The Australian Dollar to Japanese Yen exchange rate is currently trading at 96.4777
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