Aussie is heading higher today, but its direction is far from certain. Australian dollar has overcome some earlier losses to the US dollar, and it is gaining against European currencies right now.

Disappointing data in Australian has been holding the Aussie back somewhat. After yesterday’s positive US economic data, Australia’s lukewarm data did little to help the Aussie on the Forex market. Consumer confidence in Australia remains week, with the Westpac-Melbourne Institute index falling  2.5 per cent in August from the marker in July.

Recent interest rate cuts from the Reserve Bank of Australia have done little to boost confidence, or get the economy going. Inflation remains very flat, even with recent wage growth. As a result, the RBA may decide to cut interest rates again.

For now, though, the Aussie has taken the upper hand. The economy is still performing better than European economies, and the Australian dollar is preferred to the pound and the euro. And, with the excitement over US retail sales ebbing, the Aussie is once again eking out gains against the American currency. Gold prices which are also heading a little bit higher, are helping a bit.

At 13:56 GMT AUD/USD is up to 1.0508 from the open at 1.0485. EUR/AUD is down to 1.1688 from the open at 1.17850. GBP/AUD is down to 1.4919 from the open at 1.4945.

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