Australian consumers more upbeat than businesses

The Australian Dollar inched higher on Wednesday, as Westpac Melbourne Institute said Oz consumers are more upbeat on the economy on the back of half-century low interest rates and constantly rising property prices. The survey showed a gauge of consumer morale advanced 1.9% in November, hitting 110.3, inching further away from a 100 threshold that indicates net-optimism. A sub-index of personal finances surged 13.3% in November, however, Australians were more cautious about their future, as a measure of outlook plunged 7.9%. In general, expectations for the economy edged up 0.4%, while a more forward-looking index advanced 0.5%. A separate report from the Bureau of Statistics showed that total hourly rates of pay, excluding bonuses, increased by 0.5% in September, giving the central bank scope to cut interest rates further if needed. On a yearly basis, wages rose 2.7%. Despite a modest rise, wage growth remains subdued, as labour market cools, and there is weak inflationary pressure in the economy. Still, it provides room for the RBA to make adjustments to its policy; however, taking into account developing housing market, the possibility of another rate cut is rather low. During the last couple of months, Australian economy has been sending mixed signals, as it tries to switch to a growth led by other sectors, amid cooling investment in mining projects. Though companies are still optimistic about future outlook, they are not showing willingness to hire staff, weighing on consumers' mood as well.