The AUD will see the latest Westpac consumer confidence numbers, and the Aussie dollar can add to recent gains.
The AUDCAD exchange rate trades at 0.9272 and has resistance ahead at the 0.9500 level.
AUDCAD – Weekly Chart
There is the potential for a pullback along the way, but the trend looks strong and should head to the upper bound.
The last reading of the Westpac consumer confidence number saw an all-time low of 78. Rising inflation, higher interest rates, and lagging wage growth have weighed on spending power in the country. The reading was also the most significant drop in two years, with a plunge of 6.8% compared to 0.9% in October.
Australian inflation has surged to a 32-year high for the third quarter. At the same time, the Reserve Bank also forecasted that inflation could rise further for the rest of the year. The central bank hiked interest rates by 25 basis points in November, which also dented consumer confidence, even though the raise was smaller than previous moves by the RBA this year.
In another indicator, consumers are stressed about their personal finances in the lead-up to Christmas, with lower confidence. ANZ and Roy Morgan’s weekly consumer confidence indicator has dipped 0.5%, led by a 6.2% drop in its “current financial conditions” measure. The “future financial conditions” gauge also fell by 1.9%. ANZ head of Australia economics David Plank said it was common for consumer interest in buying big-ticket items to grow in the weeks before Christmas.
Despite this, Canada’s economy is more at risk, according to the International Monetary Fund. The group says the Canadian economy faces a “mild recession” or worse. According to IMF predictions, unemployment will rise by 6.2% as inflation returns to roughly 2% by the end of 2024, which broadly aligns with forecasts from both the Bank of Canada and the Liberal government.
