As expected, Australia’s Q1 GDP growth slowed to 0.3% or 1.7% annualised, well below the previous quarters 1.1% read & 2.4% annualised level.
The contraction was due to the after effects of Cyclone Debbie in Queensland, sluggish retail sales, higher home loan interest rates, record household debt’, a low inflationary environment and a 50% fall in the price of iron ore over the past 6 months.
The RBA remains on hold with interest rates this year after reiterating its neutral stance, meaning the chance of a rate cut is the same as a rate hike for the next period ahead.
The Aussie Dollar has benefitted from a weaker US$ and the fact that it has avoided a recession for 26 years! A break above the 200 day moving average of 0.7530 now open s the way for a re-test of 0.7640 resistance level in coming days.
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Have a great day!
Tony Boyadjian
Senior Vice President, Foreign Exchange
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