Australian Dollar Weak Despite Decent Data

The Australian dollar declined against other most-traded currencies today even though domestic macroeconomic data was decent and should have supported the Aussie. The probable reason for the currency’s decline was a disappointment in the speech of US President Donald Trump, who did not reveal any news about progress in the US-China trade negotiations.
The Australian Bureau of Statistics reported that the seasonally adjusted Wage Price Index rose 0.5% in the September quarter from the previous three months. It was the same rate of growth as in the June quarter, and it matched market expectations.
The Westpac-Melbourne Institute Index of Consumer Sentiment rose 4.5% in November from October. The rise followed the sharp drop by 5.5% in October. The report commented on the result:

The pattern of confidence falling in response to a rate cut and recovering when the RBA remains on hold repeats what we saw earlier in the year when the Index fell by 4.1% following the July cash rate cut only to recover 3.6% in August, when the RBA left rates unchanged.

The report added further:

This result continues to support the general view that consumers are somewhat unnerved by the announcement of low rates and media controversy around the banks’ responses.

AUD/USD declined to 0.6825 as of 11:09 GMT today from the open of 0.6839, retreating from the daily high of 0.6857. EUR/AUD was up to 1.6130 from the open of 1.6089, bouncing from the daily low of 1.6053. AUD/JPY fell from 74.56 to 74.37.

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