For the last three days the Australian Dollar has experienced downward pressure against the US dollar.
There is a data release officially called the Consumer Sentiment Index; which measures the level of consumer confidence, and is an average of five indexes measuring different aspects of consumer fiscal health. Yesterday, this figure came out significantly negative compared to last month’s figure; the result was posted at -4.6% (94) from a past figure of 3.8% (98.5).
This index is one of the few indicators that is entirely expectation based. Households report their views on current buying conditions for household items and where they feel are the “wisest” places to invest savings. Further to this, views on future political policy (taxes, politicians, government) and economic conditions (wages, inflation, unemployment) are also surveyed. Confidence figures are often leading indicators for the consumer spending and the economy as a whole.
Therefore, yesterday was the final straw on the “AUD/USD camel’s back” that broke through the four monthly range bound floor in the AUDUSD. Typically when a currency pair breaks out of the predetermined range to the downside, it tends to continue to fall. This could mean that the Unemployment figures today may give us more negative figures to push the AUD further in to the red. Today we are expecting 15,000 jobs to be added to the economy and the unemployment rate to fall to a figure of 6.3%, slightly down from the previous figure of 6.4%.
The Unemployment figures are due out at 11.30am AEST and are expected to show some movement. Technical signs are expecting the figure to lower the AUD; however, fundamental expectations are suggesting better figures than last month.