Aussie GDP Q3 misses the mark, AUD/USD drops to session lows


  • AUD/USD drops to the first bearish target area in the 0.6830s on Australia’s Q3 GDP miss on a MoM basis.
  • GDP (QoQ) (Q3) 0.4 % vs exp  0.5 % (prior  0.5 %) was the catalyst for the downside in AUD/USD. 

Australia’s Q3 national accounts in the Gross Domestic Product has been released. Prior to the data, analysts at Westpac had noted that," growth over the year to Q2 was just 1.4%, the slowest pace since 2009 and revealing that the economy was declining in per capita terms," arguing that, "favourable base effects should ensure that annual growth at least improves.

The data arrived as follows

  • Gross Domestic Product (YoY) (Q3) 1.7 %  vs exp  1.7 % (prior 1.4 %).
  • Gross Domestic Product (QoQ) (Q3) 0.4 % vs exp  0.5 % (prior  0.5 %).

Full report

The Australian economy grew 0.4 per cent in seasonally adjusted chain volume terms in the September quarter 2019 and 1.7 per cent through the year, according to figures released by the Australian Bureau of Statistics (ABS) today.

Chief Economist for the ABS, Bruce Hockman, said: “The economy has continued to grow, however, the rate of growth remains well below the long-run average.” Net exports contributed 0.2 percentage points to growth this quarter. Domestic final demand remained subdued contributing 0.2 percentage points. Government spending was the main contributor to growth in domestic final demand, reflecting ongoing delivery of services in disability, health and aged care.

RBA can hold and wait to see how things develop until 2020 

  • The nuts and bolts of this report point to an RBA cut, potentially in the early part of 2020, considering there has not been a drastic worsening in key areas, yet with improvements in exports and consumption albeit with continued dependence on government spending and a requirement on low-interest rates. 

"It certainly suggests that activity has been stronger in the recent past, though it is the sharper downturn in activity in 3Q19 that we think is the more important consideration for the RBA, and which will likely weigh on the AUD," analysts at ING Bank argued – "The Reserve Bank of Australia has been characterising the economy as experiencing a "gentle upturn". But this data seems to suggest more of a gentle downswing. Consequently, it will be very hard for RBA Governor Lowe to hold back from easing again in February 2020, as he did this week."

AUD/USD daily chart and downside levels to watch 

Bearish targets

  • 0.6815/30
  • 0.6780
  • 0.6724
  • 0.6671

The initial support offered by the 50-day moving average and convergence of the 21-hour moving average that comes in at around the day's lows of between 0.6815/30 has been targeted on the release. 0.6780 comes as a key extension level for the move, but there is little follow-through at this stage considering how weak the US dollar is and a reluctance to be 'long' of it. However, on a follow-through, bars can target the 0.6724 October 16 low ahead of the 0.6671 October low. 

 

 


 

 

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.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD retreats after strong NFP, weak German data

EUR/USD is trading below   1.11 after US Non-Farm Payrolls beat expectations with 266K and mixed wage growth. Earlier, weak German data weighed on the euro. Updates on trade are awaited.

EUR/USD News

GBP/USD shrugs off strong NFP, focuses on UK elections

GBP/USD is trading below 1.3150 but off the post-NFP lows. The US gained more jobs than expected. The Conservatives remain in the lead ahead of the debate between PM Johnson and Labour leader Corbyn.

GBP/USD News

US recession? Not so fast, a calm look at the economy and currencies ahead of the NFP

Recent US economic indicators have been downbeat, but they include silver linings and are backed by robust consumption. Valeria Bednarik, Joseph Trevisani, and Yohay Elam...

Read more

Gold drops to fresh multi-day lows on upbeat NFP report

Gold faded an intraday bullish spike to the $1480 area and tumbled to fresh multi-day lows, around the $1465 region in reaction to upbeat US monthly jobs report.

Gold News

USD/JPY: bearish ahead of US employment figures

Japanese data missed the market’s expectations, triggering fresh concerns about the economy. Focus on US employment figures, market players anticipate dismal numbers. USD/JPY is technically bearish could break below the 108.00 level.

USD/JPY News

Forex MAJORS

Cryptocurrencies

Signatures