Australia’s Business Conditions Improve, AUD Unaffected

Australia’s Business, Business conditions across Australia are on the uptick as the nation eases COVID-19 restrictions and reopens its economy, especially across Sydney and Melbourne. The latest survey; from the National Australia Bank (NAB) reveals an improvement in its business conditions’ index from 10 in October to 12 in November; well above average levels.

The surge in the headline index was powered by a strong improvement in employment, with its sub-index rising from 6 in October to a high of 11. The index for sales picked up from 15 to 16 while profitability held steady at 8 through the month of November.

Capacity utilization rates of businesses across Australia also; rose sharply to 83.2%, indicating a strong possibility of higher investments to increase output levels going forward. On another positive note, forward orders index also held steady at a strong level of 14.

According to NAB chief economist, Alan Oster, “Overall; these results indicate a strong recovery is underway. There is; still scope for things to improve further in coming months, particularly in recreation & personal services which was still in negative territory in; November despite many restrictions easing in the month.”

Impact on the Australian Dollar

The positive economic data failed to drive any positive price action in the AUD; as traders pile into the US dollar ahead of the upcoming; Fed meeting this week. At the time of writing, AUD/USD is trading around $0.709.AUD/USD;

The risk sensitive Australian dollar has also taken a beating; over reports of the first death due to the Omicron variant in the UK. This has once again raised some concerns about the latest variant of COVID-19 and how it could potentially derail economic; recovery globally.