Australian consumer sentiment improved limited as consumer optimism was suppressed by the downturn in family finances. Meanwhile, AUD/USD weakened thanks to the prospect of a Fed Rate Hike.
On Wednesday (10/November), Westpac Banking Corporation published data on Australian Consumer Sentiment which increased from 104.6 to 105.3 in November.
This increase reflects consumer optimism that is increasing ahead of the year-end holidays.
According to Westpac, the general sentiment index has not changed much in the last two months even though Sydney and Melbourne have emerged from the COVID-19 emergency status. In fact, consumer confidence in the same period last year was able to jump 32 percent.
It is noteworthy that the family finance sub-index decreased from 92.3 to 88.1 compared to last year.
The survey results for the next 12 months also fell from 109.7 to 108.9, reflecting the financial difficulties currently being faced by most Australian households.
Despite the downturn in the household sector, optimism over the near and medium-term economic outlook continues to grow.
The economic conditions sub-index for the next 12 months increased from 103.2 to 106.6, while the economic conditions for the next 5 years increased from 108.1 to 111.0.
Most surprising was the unemployment expectations sub-index which fell 11.1 percent from 107.1 to 95.3.
It should be noted that this data is a gauge of the unemployment outlook for the next 12 months.
Accordingly, the Australian labor market is expected to tighten further, which will encourage an upward trend in workers' wages and impact on the inflation rate.
In the months ahead, the trend of Australian consumer sentiment is expected to continue to improve due to the success of vaccinations, which boosts consumer optimism.
The state of New South Wales (NSW) became the region with the fastest rate of increase in optimism, which was 4.4 percent.
AUD/USD under pressure
The positive consumer sentiment data this morning did not have a high impact on the movement of the Australian Dollar against the Greenback.
The AUD/USD pair is currently moving in the range of 0.7377, only up 0.01 percent from the daily open price.
Overall, the Australian Dollar is still under selling pressure given the position of the US Dollar which is still supported by the prospect of a Fed rate hike.
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