Digital tempreture display A6 2.5tdi

ALTSEL

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My digital temp guauge is showing incorrect outside air temps between -35 and + 40, randomly counting up and down. 1999 2.5Tdi SE saloon

1) why?
2) where is the sensor located?
3) would this effect my internal climate control?
 
come on guys, RSW or somebody supply the answers to the above please!!!!!!!!!!!!!!1
 
Sensor is located inside the nose section (lift bonnet and look down, you can't miss it, centrally located). I guess it could effect A/C performance but I'm not sure. Try unplugging and reconnecting the sensor (most likely cause is a bad connection.