The Australian dollar is trading lower today after disappointing local data raised the stakes of another interest rate cut by the RBA.
At 6.19pm (GMT) The Aussie dollar was trading at US68.67c down from US69.04c in yesterday’s trade.
The Westpac consumer confidence index from Australia released earlier in the day came in at 97.3, well down on last month’s figure of 100.8, which caused the Australian dollar to tumble around US1c against its US counterpart.
The index is seen as a key indicator of consumer sentiment, and with shoppers tightening their belts, bets are rising for a further interest rate cut from the Reserve Bank of Australia in the nearest future.
According to analysts at Citigroup (N:C), the chances of the RBA cutting interest rates in the first half of the year stand at 88 percent while a move in the 2nd half of the year is sitting around 100 percent.
Although the Australian dollar has been hammered in recent weeks, it has held up pretty well after reaching a 7-year low last Friday, fending off oil prices at a 12-year low and continued weakness in the country’s biggest commodity, iron ore.
Probably helping the Aussie dollar’s resilience today was the release of the latest CPI numbers from the US, which came in slightly below expectations at 0.7 percent while the yearly figure was in line with consensus at 2.1 percent.