Australian Dollar Quiet despite Soft Housing Data

The Australian dollar (AUD/USD) was steady during Asian trade hours, despite a solid business confidence report and an underwhelming home loans report.

This morning, the National Australia Bank (NAB) released its June business index. This came in at 9, which was just above the previous figure of 8. However, the number which gauges firms’ assessments of conditions hit 15. This was well above May’s print of 11. It was also well above the average level. Australian businesses seem more confident than consumer. Australia’s export machine is increasing faster than domestic sales. The NAB did state that the retail sales were finally indicating improvement.

NAB did say that there was some hope that the official unemployment rate could come down. At least to the current survey levels. However there degree of slack in the Australian labor market.

The Down Under also released home loans data for home purchases. This number rose by 1.1 percent, monthly, in May. This is according to official figures released this morning, as well. This was well below the 1.5 percent gain investors had expected. It was also well below the print in April at 1.9 percent.

Australian Dollar ignores Data

The Reserve Bank of Australia is keeping a close eye on domestic housing prices. The RBA is also closely monitoring labor market conditions. Both of these appear to be its two major monetary policy drivers. At its last monetary policy decision, held last week, the central bank declined to join other developed-market central banks by remaining neutral on its accommodative monetary policy. The RBA refused to increase its hawkish rhetoric.

The RBA’s official cash rate (OCR) is currently at its 1.50 percent record low. This is unlikely to change until well into next year.