The Australian dollar is looking perky ahead of today’s GDP release

The Australian dollar rallied back above the 75 cent level
overnight, buoyed by an
optimistic June monetary policy statement
from the Reserve
Bank of Australia and further US dollar weakness.

However, it finished mixed against the crosses, partially in
response to
expectations for a soft Australian March quarter GDP report

that will be released later in today’s session.

Here’s the Aussie dollar scoreboard as at 6.55am AEST.

AUD/USD 0.7505 , 0.0022 , 0.29%
AUD/JPY 82.1 , -0.53 , -0.64%
AUD/CNH 5.0691 , -0.0048 , -0.09%
AUD/EUR 0.6655 , 0.0008 , 0.12%
AUD/GBP 0.5812 , 0.0013 , 0.22%
AUD/NZD 1.0438 , -0.0042 , -0.40%

“AUD/USD rallied overnight to near 0.7520 supported by
yesterday’s constructive RBA monetary policy statement and a
weaker USD,” said Elias Haddad, senior currency strategist at the
Commonwealth Bank.

“The RBA maintained its forecast for GDP growth of ‘a little
above 3%” over the next couple of years’, highlighting that
business conditions have improved and capacity utilisation has

optimistic overtones
helped the Aussie to recover after
falling heavily earlier the session. And along with another bout
of US dollar weakness driven by falling bond yields, it ensured
that the Aussie rallied to a one-month high in overnight trade.

The AUD/USD currently sits just below its 200-day moving average
of .7527.

After days of speculation as to how the economy performed in the
first three months of the year, movements in the Aussie on
Wednesday will be dictated by the release of Australia’s latest
GDP report at 11.30am AEST.

A steep deceleration in growth is expected with the median
economist forecast centred around an increase of 0.3%, leaving
the year-on-year expansion at 1.6%, the smallest seen since the
September quarter of 2009. Some are even forecasting a decline in
GDP, something that will undoubtedly weigh on the Aussie should
that eventuate.

However, while the report has the potential to generate
short-term volatility, it must be remembered that this report
reveals how the economy was performing over two months ago, not
today or in the future.

That’s something to consider, particularly as financial markets
are forward rather than backward looking. For those who are
interested in the release, this 10-second guide has
further information on what to expect.

Besides the GDP report, there’s little to interest traders across
the Asian region.

The Ai Group will release Australia’s Performance of Construction
Index for May while Japan will release its latest leading
indicator — neither will move the Aussie.

The quiet data calendar continues this evening with the final
print of Q1 GDP in the Eurozone and US consumer credit the only
releases of note.

Given a lack of market moving events, position adjustments ahead
of key data, political and central bank meetings, may also be a
factor during the session.

Read more posts on Business Insider Australia

Source link