When is the Aussie GDP release and how could it affect the AUD/USD?

Australian GDP overview

Early Wednesday at 00:30 GMT sees the next round of Australia's gross domestic product (GDP) figures for the final quarter (Q4) of 2018. The annualized pace of economic growth is forecast to clock in at 2.5%, a slight tick under the previous period's 2.8%, while the quarter-on-quarter numbers are expected to remain unchanged at 0.3%.

With the Reserve Bank of Australia (RBA) keeping interest rates staunchly buried at 1.5%, coupled with the Governor’s equal emphasis on rate-hike/cut chances, a strong reading is required for the AUD/USD to register noticeable upside.

Ahead of the outcome, TD Securities said, “We look for +0.2%/q and 2.4%/y, a shade below current RBA thinking of 2¾%/y (prior +0.3%/q, mkt +0.3%).”

Additionally, analysts at Westpac say, “For 2019, we expect GDP growth to be around 2.2%, with: consumer spending sluggish; home building activity contracting sharply; business equipment spending weak (in part due to uncertainty around the Federal election); but strength in government demand and a positive contribution from net exports, led by LNG (additional capacity) and services (strong demand from the Asian region and supported by the low Australian dollar).”

How could it affect the AUD/USD?

Given the recent shift in RBA Governor’s view from future rate-hikes to giving equal probabilities to either side rate change move, coupled with conveying soft growth chances, weak GDP figures are likely to offer additional downside to the AUD/USD towards revisiting the 0.7020 and 0.6980 immediate supports.

On the contrary, a strong growth figure past market consensus and prior reading can trigger the pair’s upside to 0.7100 and the 100-day simple moving average figure of 0.7165. However, pair’s rise past-0.7165 towards 200-day SMA level of 0.7250 depends mainly on the data strength.

Key notes

AUD/USD trades around 0.7060, near two month lows, after upbeat US data

AUD/USD Technical Analysis: Aussie bulls looking for a breakout ahead of Australian GDP

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.