westpac

Australia's Westpac Consumer Confidence Index lost 3% in August, developing a nine-month slump that took off 22.9%. The index was near current levels twice in 2020 during the worst periods of lockdowns and uncertainty and even earlier in 2008 during the worst financial crisis. But current levels are well above the recessionary periods of the late 1980s and early 1990s. However, this does not promise a bleak future for the economy as it will shift the government's and RBA's focus from fighting inflation to supporting demand. AUD/USD On forex, the AUDUSD has been languishing around its 50-day moving average for the last two and a half weeks. At the beginning of August, it hit a glass ceiling at 0.7000, separating the crisis from the norm for the Australian economy for years. Forex - Australian Dollar To US Dollar The inability of the bulls to push the pair higher may be seen as a structural weakness of the buyers, passed on the sight of the sharp decline in the prices of metals, an important export commodity. In this case, the AUDUSD may fall without significant headwinds to 0.6700, the low of July. If there is insufficient demand, the road to the abyss opens, and the pair will move into a channel at 0.50–0.60 for the following year.

NZD/USD is down 1.3% this week New Zealand consumer confidence rises Powell to testify before a House Committee on Wednesday The New Zealand dollar is sharply lower for a second straight day. In the North American session, NZD/USD is trading at 0.6148, down 0.83%.   New Zealand consumer confidence rises New Zealand Westpac consumer confidence accelerated to 83.1 in May, up from 77.7 in April and above the consensus of 76.2 points. Still, this is a low level as consumers remain pessimistic about economic conditions. The Westpac survey found that even though household incomes were higher due to strong wage growth, household finances were squeezed for two reasons. First, the cost-of-living crisis has hurt households, with inflation climbing 6.7% over the past year. Second, high interest rates have impacted on many households as mortgage rates have shot up. Weak consumer confidence, which could well translate into a drop in consumer spending, would not be bad news at all for the Reserve Bank of New Zealand, which needs the economy to slow in order to pause interest rate hikes. The benchmark rate currently stands at 5.50% and the RBNZ meets next on July 12th. Last week’s GDP report for the first quarter showed growth contracted by 0.1%, which means that technically New Zealand is in a recession, with two consecutive quarters of negative growth. In the US, this week’s data calendar is very light. There are no tier-1 releases on Tuesday and the markets are looking ahead to Wednesday, with Jerome Powell testifying before the House Financial Services Committee. Powell will likely be grilled by lawmakers on the Fed’s unconventional interest rate path, as the Fed paused last week after ten straight hikes but has signalled that it plans to renew hiking at next month’s meeting. . NZD/USD Technical NZD/USD is putting strong pressure on support at 0.6147. Below, there is support at 0.6056 0.6198 and 0.6276 are the next resistance lines