Australian GDP overview
Early Wednesday at 01:30 GMT sees the next round of Australia's gross domestic product (GDP) figures for the second quarter (Q2) of 2019. The annualized pace of economic growth is forecast to clock in at 1.4%, a slight tick under the previous period's 1.8%, while the quarter-on-quarter numbers are expected to rise to 0.5% from 0.4%.
With the Reserve Bank of Australia’s (RBA) latest downbeat comments concerning the economic growth, a strong reading is required for the AUD/USD to register a noticeable upside.
Ahead of the outcome, Westpac said:
Westpac’s forecast remains 0.5%qtr, 1.4%yr, in line with the updated Bloomberg consensus. This is at least a long way from the recent talk of a headline zero or negative quarterly number, but with population growth around 1.6%yr, it is a contraction in output per capita. In yesterday’s statement, the RBA conceded H1 2019 growth “has been lower than earlier expected” but insisted that growth “is expected to strengthen gradually to be around trend over the next couple of years.”
The Australia and New Zealand Banking Group (ANZ) follows suit while saying:
Growth of just 0.5% is expected for Q2 which would put the annual growth rate at 1.4%, well shy of inflation targets. The GDP data is expected to confirm the economy will need further stimulus to push unemployment down and inflation up.
How could it affect the AUD/USD?
Considering the RBA’s downbeat forecast of economic growth, coupled with an intact bearish bias, weak GDP figures can trigger the AUD/USD pair’s decline towards 0.6690/85 area including recent lows ahead of dragging the quote to August low surrounding 0.6677.
On the contrary, a strong growth figure beyond market consensus and prior reading can escalate the pair’s recovery early-August month high near 0.6820 and June month low close to 0.6830.
Key notes
AUD/USD: 21-DMA caps immediate upside ahead of Australia GDP
AUD/USD Analysis: Q2 GDP to challenge recent Aussie strength
About the Aussie GDP release
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.
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