Aussie GDP Disappoints
The Aussie Dollar has been heavily sold throughout the European morning on Wednesday as traders digest weaker-than-forecast data overnight. AUD quarterly GDP came in at 0.35 vs 0.5% expected, the latest in a string of weak Aussie economic data we’ve seen recently. On the back of the data, forecasts for fresh RBA easing have jumped with AUD selling off accordingly. On an annualised basis, GDP was seen at 0.8%, below the prior 1% reading and below the 1.1% the market was looking for.
Trump Trade Impact
The Aussie Dollar has suffered a bearish shift in sentiment in recent months. A stronger USD linked to Trump’s re-election success, as well as weaker commodities prices and softer China activity, have contributed to sustained selling from the September highs. With traders fearful over the impact that fresh trade wars under Trump will have on the currency, short positions have been piling up.
RBA/Fed Outlook
Looking ahead, AUD looks subject to further weakness near term as traders increasingly price in a fresh rate cut from the RBA before year end. Additionally, if we see renewed upside in USD, perhaps in response to the a hawkish-cut from the Fed this month ( cutting but signalling slower easing ahead) AUDUSD could well test 2023 and 2022 lows ahead of year end.
Technical Views
AUDUSD
The sell off in the Aussie has seen the market breaking below the .6520 level. Price is now fast approaching a test of the rising trend line from 2023 lows. Below there, .6275 will be the next support to note with .6195 the deeper level to watch.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.