Business Sentiment Rises In Australia For The First Time Since 2007

Daily Forex Fundamentals | Written by ecPulse.com | Jul 14 09 07:54 GMT |

Australia released today some data from the business sector, where the business conditions have improved to -2 in June from the previous reading -14, while the business confidence rose into the positive area reaching to 4 during the month of June from the previous -2. Confidence entered the positive area for the first time since December 2007, after Australia’s central bank lowered rate to the lowest in 49 years at 3.00% in order to support domestic consumption, while the stimulus plans have managed to slightly compensate for the decline in exports. Even if the economy sees higher unemployment which reached to 5.8% in June, the confidence is still improving since the economy managed to avoid falling into recession during the first quarter of the year after growing unexpectedly by 0.4%, being of the few economies around the world to stand in face of this worldwide recession. The improvement in consumer spending and the support seen in demand on exports since China started recovering while some other major countries are seeing some stability into their economies, are factors that helped Australia avoid recession and determined the central bank to hold rates steady in order to monitor closely the latest developments before taking any more actions. The decisions taken by the Australian government are certainly improving the future outlook of the business conditions, which might improve if worldwide trade will start picking up, raising companies’ revenues and profits, which will determine them to stop reducing jobs, then definitely consumers, will feel more confident to spend more. Moving to Singapore, which today improved its economic forecasts for this year, as the gross domestic product is expected by the government to shrink by 4.0% to 6.0% in 2009 from the previous estimation of -9.0%; the economy is obviously on the right track and might start recovering form the worst recession since 1965. Even if the growth might come slowly, however the improvement in some Asian economies, the rising in optimism, the government stimulus plans and the tax cuts were all factors that support the future outlook of Singapore which relies heavily on exports, especially in the second quarter. Ecpulse disclaimer: The content of ecPulse.com and any page in the website contain information for investors/traders and is not a recommendation to buy or sell currencies, stocks, gold, silver & energies, nor an offer to buy or sell currencies, stocks, gold, silver & energies. The information provided reflects the writers' opinions that deemed reliable but is not guaranteed as to accuracy or completeness. ecPulse is not liable for any losses or damages, monetary or otherwise that result. I recommend that anyone trades currencies, stocks, gold, silver & energies should do so with caution and consult with a broker before doing so. Prior performance may not be indicative of future performance. Currencies, stocks gold, silver &energies presented should be considered speculative with a high degree of volatility and risk