The recent rally in the AUDUSD will have GDP growth data ahead on Tuesday.
AUDUSD – Daily Chart
The AUDUSD exchange rate is trading at 0.6798 and is testing resistance from the high in early July. That level led to a sharp downturn but the pair has recovered well. The next target above is at 0.6870.
Australian GDP growth for Q2 is expected to show an annual pace of 1%. That would be slightly lower than the 1.1% recorded for last quarter and down from 2.1% in Q3 2023.
Judo Bank’s Chief Economic Advisor Warren Hogan said the economy now faces the “slowest rate” of “real” economic growth in 30 years.
“This is the slowest rate of real economic growth since the early 1990s recession,” Mr Hogan said.
“So, this is going to portray an economy with very weak consumer spending, no growth in the construction sector outside of infrastructure and of course an inflation pulse that is still persistent and hanging around”.
Voters are now turning against the incumbent Prime Minister as cost-of-living pressures weigh. Polls show Anthony Albanese’s disapproval ratings adding three percentage points to 54%. That is the worst level since his centre-left Labor government was elected in 2022. The PM’s approval rating dropped by two points to 41%.
Albanese’s faltering ratings come after the Reserve Bank of Australia said the benchmark interest rate is likely to remain at a 12-year high of 4.35% for the rest of the year. Officials are struggling to rein in inflation that’s easing more quickly abroad, where the US is expected to cut rates this month.
The United States was largely closed on Monday for the annual Labor Day holiday but will return on Tuesday. The US dollar has suffered recently after the central bank telegraphed its upcoming interest rate cut.
The USD will also face data this week with manufacturing and services PMI, leading into jobs data on Friday.
Employment figures in the country were sharply downgraded last month and a weak number could speed up the rate cuts and hurt the greenback. Analysts expect to see a 165k reading after 114k jobs were added last month.
The jobs figures are sharply lower than the 310k seen in March.
