Australia Q1 GDP stronger than expected, supportive of AUD

Ross J Burland FXStreet

Australia’s first-quarter Gross Domestic Product data has been released as follows:

Aussie GDP

Australia Q1 real GDP +0.8 pct QoQ, seasonally adjusted,s/adj, (Reuters poll +0.5 pct).
Australia Q1 real GDP +3.3 pct YoY, s/adj (Reuters poll +2.9 pct).
Australia Q1 final consumption expenditure +1.9 pct, s/adj.
Australia Q1 gross fixed capital expenditure +0.7 pct, s/adj.
Australia Q1 chain price index +4.9 pct.

A softer print in activity was anticipated given the disruptions associated with omicron and severe flooding in NSW and Queensland, analysts at Westpac explained in a note ahead of the data today.

''Consumer spending and public demand were expected to add to growth, while business investment and housing should remain subdued.''

From a policy perspective, analysts at ANZ Bank said ''the most important number from today’s Q1 GDP report will be the average earnings measure of wages.''

They said in a note prior to the data that ''partial data suggest a sharp acceleration in annual growth to around 5%. If we’re right, this will keep speculation of a 40bp move at the June meeting very much alive.''

AUD/USD update

AUD/USD has been reluctant to rally on the knee jerk, but the data is solid and could be supportive for the Aussie.

About Aussie GDP

The Gross Domestic Product released by the Australian Bureau of Statistics is a measure of the total value of all goods and services produced by Australia. The GDP is considered as a broad measure of the economic activity and health. A rising trend has a positive effect on the AUD, while a falling trend is seen as negative (or bearish) for the AUD.

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

GBP/USD extends the drop to 1.3360

GBP/USD builds on Monday’s decline and briefly clinches five-day lows near 1.3360 on Tuesday. Cable’s extra pullback follows the better tone in the Greenback as uncertainty in the Middle East prompts investors to adopt a cautious stance. Meanwhile, an apathetic UK labour market report also collaborates with the selling pressure on the British Pound.

EUR/USD stays offered just above 1.1400

EUR/USD keeps the downtrend well in place for yet another day, challenging the 1.1400 contention zone on Tuesday. The continuation of the selling impulse in spot comes amid decent gains in the US Dollar, which continues to find support in the persistent effervescence surrounding the US-Iran crisis.

Middle East crisis intensifies, Gold up

Gold now seems to have embarked on a consolidative phase below the key $4,100 mark per troy ounce in the latter part of Tuesday’s session. Meanwhile, uncertainty surrounding the Middle East conflict and rising expectations for a hawkish Fed policy outlook are expected to limit the precious metal’s bullish momentum in the near term.

XRP rebounds on rising on-chain activity

Ripple (XRP) ticks up and trades around $1.13 at the time of writing on Tuesday. This rebound aligns with a broader recovery in the cryptocurrency market, attributed to reports that mediators between the United States (US) and Iran are seeking a 10-day cessation of strikes to find a way back to the signed Memorandum of Understanding (MoU).

The Iranian war has again risen

The Iranian war has again risen to the top of the economics factor list. There is no end in sight. Intelligence experts say the current level of offense/retaliation will not change minds in Tehran, while in Washington, Trump fears all-out war, which would mean boots on the ground.

US Dollar mid-year outlook: Exceptional currency, exceptional risks?

The US Dollar enters the second half of 2026 in a markedly different position from a year ago. The King currency has recovered, reflecting persistent US inflation, changing expectations for Fed policy, geopolitical tensions and renewed demand for defensive assets.