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Dimmer AU Economic Outlook Weakens AUD USD Exchange Rate

Australian Dollar Exchange Rates

The Australian Dollar has dipped against the US Dollar today, following a poor result for the Westpac leading index. This puts the AUD USD exchange rate near its worst weekly rate, trading around the 0.7563 mark.

Australian Dollar Unsettled by Disappointing Westpac Economic Outlook

On a slow data day, AU data has seen the Australian Dollar drop against the US Dollar.

This dip has been partly caused by the Westpac leading index for May, which has fallen. The index measures the economic outlook for Australia, with a higher figure indicating greater optimism.

With that in mind, the latest dip from 1.01% in April to 0.62% in May has lowered trader confidence and caused a slight Australian Dollar decline.

Westpac’s notes have highlighted Australian commodity prices as a limiting factor;

‘The index is pointing to a clear slowing in momentum. While the growth rate remains comfortably above trend, the pace has eased markedly since the start of the year. The shift mainly reflects a less supportive backdrop for Australia’s commodity prices and in global financial markets’.

US Dollar Appreciates as Polls show Rising Economic Optimism

The recent US Dollar advance has mainly been caused by polling data, which has put US economic optimism at the highest point in 15 years.

According to a recent CBS survey, 64% of citizens see the US economy in good shape. On the flipside to this, however, President Donald Trump’s approval rating has been extremely low since he took office, recently touching 36%.

This figure also came from CBS, and conflicts with Trump’s recent boast that he had a 50% approval rating (according to a single poll).

AUD USD Decline may Worsen on Incoming US Oil Data

Australian Dollar traders are in for a long wait before the next Australian data comes out; the next data isn’t due until Monday. With that in mind, remaining AUD movement this week could be more closely tied to the US Dollar.

On the matter of AU data, next week’s biggest announcements will be the ANZ weekly confidence index on Monday, along with home sales figures and private sector credit results at the end of the week.

Moving onto the more impactful US news, the first major announcement today will cover crude oil stocks recorded up to mid-June. Stocks are forecast to fall, which could raise global oil prices. Such news may push the US Dollar up, as US oil exporters would benefit.

Further ahead, Thursday’s US news will cover jobless claims made in June. If both initial and continuing claims fall, then the US Dollar may rise and cause an Australian Dollar dip.

Ending the week will be Friday’s US PMIs for June, followed by three Fed speeches.

The PMIs are expected to show rising manufacturing and services sector activity, while optimistic Fed outlooks may also push up the USD AUD exchange rate.

Recent Interbank AUD USD Exchange Rates

At the time of writing, the Australian Dollar to US Dollar (AUD USD) exchange rate was trading at 0.7563 and the US Dollar to Australian Dollar (USD AUD) exchange rate was trading at 1.3218.