On Wednesday, the statistic bureau in Australia has been releasing the GDP data which increased by 9.6 percent year – over – year. That was happened in the second quarter.
That number was beyond the expectation of 9.2 percent and sharply increasing from the 1.1% growth in the first quarter. Meanwhile, the data is different for the quarter – over – quarter basis.
Due to that basis, the Australia’d economy increased by 0.7%. That was better than the 0.5% increse, but still 1.8% lower than the level noted in the previous level.
The good Australia’d GDP data in the second quarter period was mostly supported by the rising mine commodity in the international market. Several prices are also increasing.
The Commodity Prices in the Market
The prices of iron ore, copper and coal are heading for multi-year highs. That movement is contributing positively to the Australian economy just like what the experts are stated
Export trade rose 7.0 percent in the second quarter and hit a historical record high. This solid trade figure accounted for a 3.2 percent increase in nominal second-quarter GDP.
Besides that, The easing of COVID-19 restrictions and the recovery in the labor sector also contributed to the increase. Domestic consumption levels began to strengthen based on the report.
It can be seen in spending from the transportation services (+25.4%), hotel, café, & restaurant categories (+2.2%), and household services categories which also increased by 1.3%.
The Rebound Expectation may be Faded
Household spending on goods rose 0.9 percent as well, as did motor vehicle purchases (+7.5%). From the positive notes above, the delta variant coronavirus cases increase makes an impact.
That can make the further GDP rebound expectation fades. Furthermore, the newest news stated that there are more than 1000 new cases happened in New South Wales.
Elsewhere, the AUD / USD almost doesn’t make any reactions to that. The positive second quarter GDP data release fails to support the Australian dollar performance this day.
The AUD / USD is around the 0.7313 level which is not far from the daily open price and the last two days. It means that AUD is unable to maximize the chance from the USD weakness.
The USD Exchange Rate is Stable
The situation above appeared after a dovish statement from the Fed in the Jackson Hole symposium last week. The major currencies movement is relatively limited yesterday.
Meanwhile, the market participants are waiting for the newet US Non Farm Payroll data which will be released two days ago. The US dollar index or DXY is quite smooth around 92.65.
Greenback has been underpressured for about some few days lately. It is especially after The Fed’s leader, Jerome Powell, shared his dovish view in a Jackson hole symposium event.
However, the USD position is still supported by the expectation of the tapering announcement and implementation within this year from the Fed.
The USD Exchange Rate was not Stable Before
The US dollar was roied in the New York session last night. That was following the release of Chicago PMI data and consumer sentiment by The Conference Board that missed the expectations.
Both data were depressed due to the increase in COVID-19 cases and the surge in inflation in the country of Uncle Sam. That condition happened only in a short period of time.
After that, the USD came back to the range that it had since at the beginning of the week. The market participants are still consistent to wait for the Non – Farm Payroll data release.
That release may gives a clue about when The Fed will start its tapering. If the payroll data is dissapointing, the Eurodollar has a reason to rise again and starts the new predictions.
