Risk of AUD/USD Losses on Lower Consumer Confidence Score
This appreciation is mainly down to the low USD trader confidence – the latest Australian news has shown declining business confidence in August.
Unfortunately for AUD traders, Wednesday’s economic data might cause a drop in the AUD/USD exchange rate if another dip in confidence levels is reported.
Westpac will be releasing a measurement of consumer confidence in September early on Wednesday and the reading is expected to fall from 103.6 points to 101.
While any reading above 100 points still indicates that optimists are in the majority, the AUD/USD exchange rate could nonetheless decline on such news.
Is Greater AUD/USD Exchange Rate Volatility ahead on Australian Jobs Market Data?
Further ahead, the Australian Dollar (AUD) could also be at risk of declining in value when Thursday’s Australian jobs market data comes out.
The main data releases will be a measurement of the employment change during August, alongside a reading on the overall unemployment rate.
On the plus side, 9.7k persons are expected to have found full-time employment, alongside 26.7k more persons in employment overall.
Less supportively, however, some economists are predicting that the unemployment rate will rise from 5.3% to 5.4%.
Such a result could drain AUD trader confidence and trigger a decline against the US Dollar, as such a result will reduce the likelihood of a near-term interest rate hike.
A higher jobless rate puts less pressure on employers to raise salaries, which in turn makes the Reserve Bank of Australia (RBA) less inclined to boost interest rates.
USD/AUD Exchange Rate Outlook: Will US Dollar Rise on Lower Crude Oil Stocks?
On the other side of the pairing, the US Dollar (USD) has a chance to rise against the Australian Dollar (AUD) on Wednesday afternoon’s oil stock data.
EIA’s measurement of changes to US crude oil stocks is expected to show a drop of -0.75m barrels, which could lead to USD gains.
Lower stocks of crude oil can drive up the price of remaining stocks, which improves conditions for US oil exporters.
Will Slower US Inflation Cause US Dollar to Australian Dollar Exchange Rate Losses?
Beyond Wednesday’s US crude oil data reading, the US Dollar (USD) might decline against the Australian Dollar (AUD) when Thursday’s inflation rate data comes out.
Readings for August are predicted to show a decline in the rate of year-on-year inflation; this is tipped to slide from 2.9% to 2.8%.
While a month-on-month rise from 0.2% to 0.3% is also expected, the more negative annual reading could have the greater impact.
A slower pace of inflation reduces the likelihood of a near-term Federal Reserve interest rate hike, which might unsettle USD traders and cause a USD/AUD drop.