The Westpac-Melbourne Institute Consumer Confidence Sentiment for April came in at a higher level, at 105.3 versus 104.1 in March. Confidence level change was up 1.2% from last month, compared to a -2.4% change from February to March. This leading indicator, combined with yesterday’s higher NAB Business Conditions for March are helping to retain investor confidence in the growing and recovering Australian economy, and keeping the Australian dollar near record highs against the United States dollar.
Though the confidence level has dropped off from post-recession highs, today’s increase still brings welcomed news about the Australian economy. Most indicators, including housing prices, spending and confidence are pointing towards a more robust Australian economy and faster economic growth, most likely fueled by higher commodity prices.
Chart generated with Bloomberg Professional L.P.
The Australian dollar initially strengthened against the US dollar, lifting investor confidence in Australia. Although recent data may suggest higher consumer price indexes, the RBA might not be forced to raise the cash target rate, the benchmark Australian rate, citing efforts to further sustain economic recovery.
Chart generated with FXCM Strategy Trader