Australian Dollar Lower Despite Record High Business Conditions

The Australian dollar traded broadly lower today despite a report that showed that the business conditions index reached the record high level last month.

National Australia Bank reported that the business conditions index increased from +15 to +21 in April, reaching the highest level since the survey was performed in March 1997 for the first time. Furthermore, the business confidence index improved from +8 to +10. Alan Oster, NAB Group Chief Economist, commented on the result:

The record high in the business conditions index in the April Survey simply reinforces what has been evident since the middle of last year, that business activity in Australia is robust.

He also discussed the outlook for central bank’s monetary policy:

Our current call is for the first move by the RBA to be late this year, but as hard evidence of a firming in wages growth is yet to appear in the data, and unemployment for the moment stuck at around 5.5%, the risk is that any action by the RBA will be delayed into 2019.

Other macroeconomic reports released over the trading session were not so good, though. The Australian Industry Group/Housing Industry Association Australian Performance of Construction Index fell to 55.4 in April from 57.2 in March, signaling that the construction industry was expanding with slower pace. Seasonally adjusted ANZ Australian Job Advertisements edged down by 0.2% in April from the preceding month.

AUD/USD dropped from 0.7541 to 0.7495 as of 11:51 GMT today. EUR/AUD was up from 1.5849 to 1.5915 intraday before pulling back to 1.5879 later. AUD/JPY slid from 82.28 to 81.97.

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