Currency News News AUD USD Australian Dollar to US Dollar (AUD/USD) Exchange Rate Firms after Consumer Confidence Rises

Australian Dollar to US Dollar (AUD/USD) Exchange Rate Firms after Consumer Confidence Rises

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Forecast-Beating Growth in AU Consumer Confidence Pushes AUD/USD Exchange Rate Higher

The Australian Dollar has risen by 0.4% against the US Dollar on 15th March, thanks to a better-than-expected reading for March’s Westpac consumer confidence score.

While a 0.2% increase in consumer confidence levels hasn’t cancelled out the prior decline of -2.3%, this has still been a step in the right direction.

Commenting on the rise from 102.7 points to 103, Westpac Research Analyst Matthew Hassan said;

‘The survey detail suggests a recovery from last month’s market volatility has been mostly offset by new concerns about longer term prospects for the economy.

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Responses to additional questions this month suggest increased concerns around the economy relating to developments abroad.

The highest recall rate by topic area was of news on ‘economic conditions’ (30%), with the news also assessed as more negative than three months ago.

However, the most notable shift was around news on ‘international conditions’ which had the highest recall in 2½ years (20%) and was viewed as significantly more negative than in December.

Other categories with high recall rates included: ‘budget and taxation’ (18%); interest rates (17%); jobs (16%); and inflation (11%)’.

Concerns over US Steel Tariffs and Diplomatic Shakeup Leave USD/AUD Exchange Rate Down

Domestic developments have left the US Dollar weakened today, with the currency falling against the Australian Dollar (USD/AUD) and trading tightly elsewhere.

There are two main issues that have been lowering demand for the US Dollar recently – the first is the perception that US metal tariffs will damage the economy.

A recent Reuters survey has seen almost 90% of respondents voice concerns about Donald Trump’s steel and aluminium tariff plans, which come into effect next week.

Ethan Harris of Bank of America Merrill Lynch has warned that;

‘What is concerning is the slippery slope risk here. There is no sign of any let up in this push for protectionism with the frequency of new proposals growing.

It will be very surprising if there isn’t some measured retaliation over time from major trading partners’.

The other issue for USD traders is Donald Trump’s decision to dismiss Rex Tillerson as Secretary of State.

The two men had reportedly clashed in the past, but the timing of this firing throws upcoming North Korean talks into question.

Trump is tipped to meet with the North Korean leadership ‘by May’, but without Tillerson in place it may be difficult to lay the groundwork for the historic meeting.

The problem has been amplified by Trump’s choice of replacement – former CIA Director Mike Pompeo has shown hardline opposition to North Korea in the past.

Australian Dollar to US Dollar Exchange Rate Forecast: AUD/USD Turbulence Risk from RBA Bulletin

The week’s next major Australian economic data will be the Reserve Bank of Australia (RBA) bulletin for March, out on 15th March.

If this economic summary reveals an optimistic outlook for Australian economic performance in the future, the AUD/USD exchange rate could rise.

On the other side of the pairing, the US Dollar may advance more immediately if incoming retail sales data shows growth in February as predicted.

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