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Disappointing Australian Spending Data leads to AUD/USD Exchange Rate Losses

US Dollar Exchange Rates

While Australian GDP figures have recently suggested positive economic movement, the Australian Dollar has still declined against a stronger US Dollar.

Employment has been in focus for US Dollar traders, with the latest figures leading to USD appreciation.

Higher Australian GDP Fails to Ensure AUD/USD Exchange Rate Gains

The Australian Dollar has struggled against the US Dollar today, owing to a thorough analysis of Q3 AU GDP data.

Year-on-year GDP growth rose from 1.9% in Q2 to 2.8% in Q3, although this wasn’t quite as good as the predicted 3% result.

The quarterly GDP reading wasn’t so supportive, with 0.9% growth in Q2 slowing to 0.6%.

Perhaps the biggest problem for AUD traders was the news that household spending growth, also known as consumption, had slowed to a mere 0.2% in Q3.

This was the slowest reported level of household spending since 2008,

‘Consumer spending was very weak (and a big miss), up just 0.1% on the quarter.

The weakness in retail was expected given the turnover data released last month, but such a low headline number means that other components of spending also struggled’.

Slowing spending may be down to restrictive wage growth in Australia, which means that near-term consumer spending could remain lethargic.

USD/AUD Exchange Rate Rises as US Jobs Market Turns ‘Red Hot’

The US Dollar has traded higher against the Australian Dollar today, rising to the region of 1.3186. This follows an ADP and Moody’s Analytics report, showing greater employment.

The employment change reading showed growth of 190k positions in November, more than the forecast 185k result.

This wasn’t as good as the previous 235k jobs reading, but still raised USD trader optimism.

Giving a balanced response to the data, Moody’s Chief Economist Mark Zandi said;

‘The job market is red hot, with broad-based job gains across industries and company sizes.

There is a mounting threat that the job market will overheat next year’.

For the time being at least, this good news out of the US has raised confidence in the US Dollar and pushed it higher in the USD/AUD pairing.

Will Final RBA Bulletin of 2017 Trigger AUD/USD Recovery?

Thursday will bring mixed blessings for the Australian Dollar, with regards to national economic news.

The only concrete data will be October’s trade balance reading, which is tipped to show a falling surplus.

On the plus side, however, the Reserve Bank of Australia (RBA) bulletin might raise optimism about the Australian economy.

If the RBA document implies that wage growth could pick up in 2018, this might increase in the chances of a future interest rate hike, in turn supporting the AUD.

The next US data to be aware of will be Friday’s non-farm payrolls readings for November, along with an unemployment rate reading for the same month.

Significant growth in non-farm payrolls might support the US Dollar further, facilitating more gains against the Australian Dollar.

Recent Interbank AUD USD Exchange Rates

At the time of writing, the Australian Dollar to US Dollar (AUD USD) exchange rate was trading at 0.7578 and the US Dollar to Australian Dollar (USD AUD) exchange rate was trading at 1.3196.