AUD/USD Forecast: Aussie Holds Weak Near 0.7100 for Slower Consumer Spends
The Australian Dollar remains under pressure, with AUD/USD trading close to 0.7100 during the Asian session. The AUD/USD forecast shows that the pair is holding losses as weaker domestic data weighs on market sentiment. The main reason for today’s weakness is a drop in Australian consumer confidence.
Learn more about how Aussie jumped after the US jobs data last month.
What’s Driving the Price?
Westpac’s Consumer Confidence fell by 2.6% in February, hitting its lowest level in around ten months. This shows that Australian households are becoming more cautious about spending and impacting the overall economic outlook.
Lower confidence usually refers to slower consumer spending, which can reduce growth expectations. This is negative for the Australian Dollar in the short term. Although some business data in Australia remains stable, traders are focusing more on the slowdown in household sentiment.
At the same time, the U.S. Dollar is holding firm, supported by expectations that U.S. interest rates may stay higher for longer. This adds extra pressure on AUD/USD as investors await key U.S. jobs and inflation data.
Strong U.S. data could push the pair lower, while weak numbers may allow a short-term rebound.
Simply put, soft Australian data and steady USD demand keep the pair capped. Traders should stay alert to upcoming U.S. data releases, as they are likely to drive the next move in AUD/USD.
