AUDUSD has Reserve Bank Minutes Ahead

AUDUSD – Daily Chart 

The price of the AUDUSD is looking bearish as we approach the data and could look to test the 0.6133 level. 

Australia’s economic path is expected to bounce back from its multi-decade lows when gross domestic product data is revealed this week. The national accounts for December are due from the Australian Bureau of Statistics on Wednesday and are expected to show the economy has accelerated from the 0.8% annual growth rate recorded in the three months to September. 

The previous figures were the weakest since the 1990-91 recession, excluding the pandemic. The market is now expecting the quarterly growth rate to pick up from 0.3% to 0.5%, which would mean the economy grew by 1.2% in 2024, which is well below the yearly average of more than 3.0% recorded since the 1960s. 

Economists were forced to downgrade their forecasts after capital expenditure unexpectedly shrank by 0.2% in the December quarter. The figures included a worse than expected outcome for plant and equipment investment, which led JP Morgan analyst Tom Kennedy to trim his forecast for the country’s GDP. 

Forward-looking estimates of capital expenditure were also significantly softer than expectations, which raises “a potential headwind for near-term GDP growth”. Companies may be pulling back on commodity-related investment until they see the real outcome of tariffs. 

Labour productivity was lower during the past two quarters and Westpac senior economist Pat Bustamante expects to see a decline of 1.25% for the year, with a 2.5% increase in hours worked. 

“While the aggregate performance has been poor, it has been driven by the expansion of the non-market sector and mining,” he said. “How the non-mining market sector is performing has more direct relevance for prices and cost pressures”. 

Ahead of the important GDP growth data will be RBA meeting minutes at 8:30am HKT and investors will be looking for any updates on how the central bank wishes to act in the coming months.