- AUD/USD is reporting losses following a below-forecast Australian GDP data.
- Australia's economy grew at a slower rate in the third quarter.
- The data validates the market view that the RBA will cut rates to 0.5% next year.
AUD/USD fell more than 10 pips to hit a session low of 0.6838 after the official data showed the Australian economy expanded at a slower pace in the third quarter.
The gross domestic product growth slowed to 0.4% quarter-on-quarter in the three months to September from the previous quarter's 0.5%. While the quarter-on-quarter figure missed the estimate of 0.5% by a narrow margin, the annualized GDP ticked higher to 1.7% from 1.4%, as expected.
Further, the final consumption expenditure rose just 0.3% quarter-on-quarter compared to the 1% growth seen in the preceding quarter.
The dismal data validates the market view that the Reserve Bank of Australia (RBA) will have to provide extra stimulus in 2020 to gradually push the unemployment rate down, generate better wages and household income growth and eventually lift inflation into the target band. The central bank has delivered three rate cuts this year and is expected to cut rates by 25 basis points to a new record low of 0.75% in February.
AUD/USD, therefore, has come under pressure following the GDP data. The losses could be extended further with fresh trade uncertainty and risk aversion in the equity markets.
US President Donald Trump said overnight that he may delay a trade deal with China till after the 2020 presidential election. The US stocks dropped in response to Trump's comments with the Dow Jones Industrial Average falling by more than 1%. At press time, the futures on the S&P 500 are trading flat.
What's more, the news is crossing the wires via Reuters that the US House has passed a bill demanding sanctions on senior Chinese officials. The escalating tensions on the political front may further complicate the trade negotiations.
The AUD/USD pair is currently trading near 0.6840, representing marginal losses on the day.
|Today last price||0.6842|
|Today Daily Change||0.0005|
|Today Daily Change %||0.07|
|Today daily open||0.6844|
|Previous Daily High||0.6863|
|Previous Daily Low||0.6814|
|Previous Weekly High||0.68|
|Previous Weekly Low||0.6754|
|Previous Monthly High||0.6929|
|Previous Monthly Low||0.6754|
|Daily Fibonacci 38.2%||0.6844|
|Daily Fibonacci 61.8%||0.6833|
|Daily Pivot Point S1||0.6818|
|Daily Pivot Point S2||0.6791|
|Daily Pivot Point S3||0.6769|
|Daily Pivot Point R1||0.6867|
|Daily Pivot Point R2||0.6889|
|Daily Pivot Point R3||0.6916|
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.