The Australian dollar has levelled off after falling almost seven US cents in September to an eight-month low.
At 1200 AEST on Tuesday, the local unit was trading at 87.16 cents, a touch down from 87.19 on Monday.
It fell as low as 86.84 US cents on Monday, its weakest level since January 27.
Western Union Business Solutions currency strategist Steven Dooley said traders were reluctant to sell the currency after it got near its 2014 low of 86.60 US cents.
“The market is not really committed to driving it lower. There’s always a pause when you get to a major level like this,” he said.
“Over the next two or three days, we have a huge amount of data coming out and I think we’ll need to see a big result from those to drive the Aussie dollar lower.”
Consumer confidence, meanwhile, is stabilising as households become more optimistic about their finances.
The ANZ/Roy Morgan weekly consumer confidence index rose 0.7 per cent in the week ending September 28.
The index has stabilised around its long-run average in the past two months after a sharp decline around the time of the federal budget in May.
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ANZ chief economist Warren Hogan is confident that consumer spending will improve in the coming months now that people are feeling more confident.
“The trajectory of consumer confidence remains key for the recovery in consumer spending, which in turn will be supported by gains in household wealth on the one hand but constrained by subdued household income growth on the other hand,” he said.
While consumers are more satisfied about their own situation, there is still nervousness about the economy.
The index that measures expectations about economic conditions for the coming year and the next five years fell one per cent and 6.3 per cent respectively last week.
