The Australian GDP review
The global markets are now gearing up for Australia in the first quarter (Q1) Gross Domestic Product (GDP) figures are up for publication, at 01:30 GMT on Wednesday.
The recent data from Australia have been optimistic, which, in turn, have contributed to the Reserve Bank of Australia (RBA) to sound a bit optimistic in its last statement, published on Tuesday. Also, the AUD/USD pair trades near five-month peak in the middle of the zone overbought RSI condition on the daily chart. As a result, the vendors are waiting for is the great disappointment of the data key for the entry fee.
According to forecasts, mid-annual rate of economic growth to come in at 1.4%, below the previous period by 2.2%, while the quarter (t / t) the numbers are expected to mark, -0.3% and vs. +0.5% prior.
Before the result, Westpac has said:
Westpac is forecasting the GDP -0.4% in the quarter, matching the consensus), leaving only 1.3% higher than a year earlier. (Q2) will of course show a record of the fall (early October).
TD Securities has also forecast a high GDP, such as saying:
We expect GDP of 0.5% in the 1st quarter. This will be the first decline since the 1st quarter of 2011, the annual growth will drop from 2.2% to 1.3% in the 1st quarter. The release is unlikely to influence the markets, the markets are positioning for a recovery.
How could it affect the AUD/USD?
AUD/USD probes May 2020 high for a moment and take the offerings near 0.6930 by the press of the time or on the first Tokyo to open on Wednesday. The pair has been on the rise, they mainly concern strongly since the beginning of the week, in the middle of the wide market of optimism and U.S. dollar weakness. Also to add on to the pair of run-up could be the latest in upbeat PMI data from Australia, as well as the RBA refrain from any downbeat comments on Tuesday.
Although the major market consensus favors the GDP figures to offer a retreat, the move, the chances of the positive surprise cannot be ruled out, given the period of the investigation, which could fall short, or are considering doing so, the feline corona virus (COVID-19) led in the lock. In this case, the Aussie pair may quickly rise towards 0.7000-round-figrues.
In this regard, FXStreet’s Valeria Bednarik said, “a Q1 GDP reading is in line with the market expectations, or even slightly worse, should keep the pair on its uptrend of the trail to the psychological 0.7000 seconds. A decline would be to find an immediate support at the level 0.6810, followed by the 0.6750-price zone to the next. Below this last, the pair has room for further steep downward correction, although it seems pretty unlikely at this stage.”
AUD/USD: the Bull-to keep the reins from above 0.6900 to the advance of the Aussie Q1 GDP
AUD/USD Forecast: the Overbought zone, short-term, but still bullish
Us GDP Preview: a Modest contraction in economic activity does not affect the Aussie’s strength
On-the-Aussie GDP release
The Gross Domestic Product published 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 general indicator of the economic activity and health. A rising trend has a positive effect on the AUD, while a downward trend is seen as negative (or bearish) for the AUD.