The Australian Dollar maintained its gains on Wednesday, as even despite disappointing consumer sentiment, the AUD/USD pair was still trading around 0.9380. The pair is facing a strong resistance at 0.9394, while the key level for long traders is located at 0.94-mark. Australian companies were still confident about future prospects of the Oz economy, as recent gains in the labour market offered a more optimistic prospect.
Consumer, however, are less upbeat about the economy, as the upcoming budget cuts and new taxes weighed on households' assessments. The Westpac Melbourne Institute said a gauge of consumer sentiment climbed by just 0.2% in June, hitting 93.2 points, slightly recovering from a two-year low seen in May. Nevertheless, the index remains below the 100-threshold for the third straight month indicating that the vast majority of consumers are still pessimistic about the economy. Moreover, the index is still 6.6% below its pre-budget levels that were seen in April. While consumers are worried the budget will affect the family purse strings, the outlook for the coming year plunged by 14.2% to its lowest level in more than two years. It means that effects of the budget will not be short-lived, and, perhaps, these worrying signs will he heard by the Reserve Bank of Australia, and policymakers will reconsider their strategy.
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