AUD Remains Subdued After the Miss in the Q4 GDP Numbers
The AUD to USD ratio has been ticking lower since last week, despite the USD weakness. Last night's GDP report didn't help AUD/USD much
The AUD to USD ratio has been ticking lower since last week, despite the USD weakness. Last night’s GDP report didn’t help AUD/USD much, and even the recent surge in stock markets which shows that risk sentiment is positive, hasn’t been able to stop the slow slide for the Australian dollar.
AUD/USD Daily Chart – Declining Even As the USD Retreat
Yesterday’s Australian GDP data for Q4 of 2024 offered insights into the health of the economy following somewhat mixed readings in Q3. The Q3 GDP report from Australia showed that growth missed expectations and slowed to 0.2% compared to the expected 0.4%, matching its weakest quarterly growth in two years. However, GDP year-on-year surpassed forecasts and maintained an expansion pace of 2.1% compared to the expected 1.8%.
Australian Q4 2023 GDP Report
- Q4 GDP 0.2% vs 0.3% expected
- Q3 GDP was +0.2%
- GDP YoY came at 1.5% vs 1.4% expected
- Prior GDP YoY was 2.1%
- The ‘Chain price index’ is an inflation indication, it rose 2.0% YoY.
- Household savings ratio increased to 3.2%, from 1.9% previously, for the first time since Q3 2021, which is likely reflecting a degree of heightened risk aversion
The quarterly growth rate of +0.2% is modest and it’s worth noting that GDP would have been negative if not for population growth, particularly due to significant immigration. GDP (Gross Domestic Product) represents the total market value of all final goods and services produced within a country over a specific time period, and at this rate of growth, it’s not enticing for AUD buyers, so AUD/USD remains soft.
GDP per capita is calculated by dividing this total GDP by the population, giving an average value per person. When economists mention a ‘per capita’ recession, they are indicating a situation where there is weak economic growth alongside a rising population. In this case, per capita GDP fell by -0.3% quarterly and -1% year-on-year, highlighting the challenges posed by population dynamics on economic performance.
AUD/USD Live Chart
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