AUD/USD has barely moved in response to an uptick in National Australia Bank’s (NABs) business confidence index, released soon before press time.
The currency pair continues to trade around 0.6960, representing marginal gains on the day.
The business confidence index rose to 7 in May from April’s reading of 0. The rise in business confidence was expected. After all, the Reserve Bank of Australia cut rates by 25 basis points for the first time since 2016. Australian interest rate currently stands at a record low of 1.25%.
While the confidence index ticked higher, the business conditions ticked lower to 1.00 from April’s reading of 3.00.
Also, details of the NAB surveys show the forward-looking indicators remain weak. For instance, forward orders declined further in May and capacity utilization fell below average. The surveys also show weak price pressure across inputs and final products.
That may be the reason for AUD’s inability to cheer the rise in business confidence. Looking forward, the currency pair risks falling to the 4-hour chart 100MA, currently at 0.6933, having charted a bearish marubozu candle on Monday.
Source : FX Street