Aussie GDP in Focus
Rowan Crosby • 2 min read
The Asian pairs remain busy at the moment and today we wait on more data with GDP the key to today’s trade.
The AUD/USD was busy yesterday as we all waited on the latest update from the RBA, however, as many expected there wasn’t much more to tell. The board cited downside risks but ultimately didn’t make any swinging changes to monetary policy. We should likely get used to the current conditions with low inflation and interest rates at record low levels.
At the same time, the USD didn’t fall away too far in the US session and this made for a bit of a change of pace. The Greenback has been very soft since Jerome Powell announced the changing inflation target for the FOMC.
That all meant the AUD/USD, could break any higher than 0.7400 while it did see small upside over the course of the day.
The main focus today is the latest GDP print for Australia. Today we will be focused on the Q2 figure. This is expected to show a large contraction to -6.0% which reflects the height of the COVID lockdown measures and will hopefully be the lowest point we see.
That said, this is a soft number and Australia is not a country that is used to periods of negative growth. But the case is the same for all developed countries around the world.
NZD/USD Breaks Higher
While all the data is from Australia at the moment, the NZD/USD has continued to power ahead. Price has made its way above the 0.6700 and it looks like it is consolidating in that range. The more time price spends above a level, the more bullish it is, so we should expect a test of 0.6800 in the coming days.
Any more weakness in the USD could see the NZD really outperform here.