Business conditions in Australia rebounded in September due to a falling Australian dollar and talk of an interest cut, a survey by National Australia Bank (NAB) showed on Tuesday.
The National Australia Bank (NAB) Business Survey for September showed that business conditions rose to a reading of two points in September from minus three points in August, moving above the zero level that separates expansion from contraction.
The NAB's business confidence in September also rose to minus two points in September, from minus nine points in August.
The NAB said the improvement showed the Australian economy could be stabilizing.
"However, there are still signs that a swift recovery may not ensue, with forward orders remaining weak and stocks contracting a little in the month," the NAB said in a statement accompanying the survey on Tuesday.
After the Australian dollar hit a post-float record high of 110. 81 U.S. cents on July 27, it plunged in September on the back of negativity about the Eurozone government debt crisis.
For most of September, the local unit was trading below 105.00 U.S. cents and fell below parity with the US dollar toward the end of the month.
Speculation is growing that the Reserve Bank of Australia (RBA) will cut its cash rate in November from the current level of 4.75 percent as inflation pressures ease.
The NAB said these two factors prompted business conditions to rebound sharply in September.
"Confidence rose across a majority of industries in the month, with a particularly strong rise in manufacturing implying that the lower AUD (Australian dollar) provided some relief," the NAB said.
"The survey results signal caution about the likelihood of monetary policy being loosened in the near term, although the odds of a rate cut are clearly higher following the slowing in global growth and financial market volatility."