The Australian dollar took a hit overnight amid disappointing growth figures. The GDP grew 1.8%y/y, slightly below the 1.9% expected by most economists. On a quarter-over-quarter basis the economy grew 0.8% compared to 0.9% medina forecast. Nevertheless, the jump in growth compared to previous quarter data is quite substantial as the expansion was limited to 0.3%q/q. The only blot in this otherwise encouraging landscape is the drop in household saving ratio from 5.3% in the March quarter to 4.6% in the June quarter, while at the same time household spending increased 0.7%q/q. This raise the question whether the pace of growth is sustainable in the medium to long-term and if not when it will kick back economy growth as Australian start to save money again.
AUD/USD eased as low as $0.7974 this morning before stabilising slightly below $0.80. On the medium-term, the pair is still trading within its multi-month channel (0.7787-0.8066). it should remain so ahead of Draghi and most importantly Yellen in two weeks.
By Arnaud Masset