According to Greg Gibbs, analyst at Amplifying Global FX Capital, the confidence in the Australian economy has diminished since the release of weaker than expected Q3 GDP growth; including weaker household consumption growth
“With the AUD more closely aligned with Chinese equities in the last year, it is not clear if domestic economic and financial conditions (in Australia) have had a significant impact on the AUD.”
“The accelerating decline in house prices in the last year has contributed to fear that household consumption may slow further over the coming year. Along with a peaking in construction activity, this may pull the economy to below trend growth; pressuring the RBA to consider rate cuts.”
“Reports on retail foot traffic and mixed results reported by a number of retailers in late December are contributing to concerns that household consumption may be slowing; although data in November were a bit stronger than expected (still only up 2.8%y/y).”
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