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Australian weekly consumer sentiment falls, overall confidence stays above long-run average

Australian weekly consumer sentiment falls, partly reversing the rise recorded in the previous week. The ANZ-Roy Morgan Australian Consumer confidence fell last week by 0.7 percent, as compared to the rise of 1.5 percent seen in the prior week. The fall was driven by the declines in confidence about economic conditions and purchasing a major household item.

The perception of consumers of current financial conditions saw growth of 3.5 percent, building on the gain of 3.7 percent in the prior week. Confidence about the future financial situation rose 2.4 percent, reversing previous week’s modest fall of 0.4 percent. Countering these gains, confidence towards current and future economic conditions dropped 1.9 percent and 3 percent, respectively. The ‘time to buy a household item’ sub-index fell 4 percent as compared to a rise of 2.3 percent last week. Four-week moving average inflation expectations came in stable at 4.3 percent.

The overall confidence continues to be above the long-run average, noted ANZ Head of Australian Economics, David Plank. Significantly, the perception of households of the current financial situation rose robustly. The continued strength of the labor market is expected to have driven this rebound and seems to be more than countering the news of modest rises in floating mortgage rates.

“On the weak side, the ‘time to buy a household item’ subindex fell a sharp 4.0 percent last week to 127.8. This subindex has fallen quite sharply since late June and likely reflects an adjustment process by households in an environment of falling house prices and low wage growth”, said David Plank.

At 11:00 GMT the FxWirePro's Hourly Strength Index of Australian Dollar was neutral at -11.589, while the FxWirePro's Hourly Strength Index of US Dollar was slightly bullish at 69.1729. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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