When is the Aussie GDP release and how could it affect the AUD/USD?

Australian GDP overview

Early Wednesday at 01:30 GMT sees the next round of Australia's gross domestic product (GDP) figures for the first quarter (Q1) of 2019. The annualized pace of economic growth is forecast to clock in at 1.8%, a slight tick under the previous period's 2.3%, while the quarter-on-quarter numbers are expected to rise to 0.5% from 0.2%.

With the Reserve Bank of Australia’s (RBA) latest interest rates cut, coupled with the Governor’s emphasis on rate cut chances, a strong reading is required for the AUD/USD to register noticeable upside.

Ahead of the outcome, Westpac said:

Australia’s Q1 GDP report (11:30 am Syd/ 9:30 am Sing/HK) poses the usual risk of a surprise, with the past year having produced both upside and downside misses. The median forecast in the Bloomberg survey has edged up to 0.5%qtr. Westpac remains on 0.6%qtr, 1.9%yr, but with risks to the downside. The arithmetic of our Q1 GDP forecast is: domestic demand +0.3%, inventories +0.04ppts, and net exports +0.23ppts. As always, consumption is a wildcard, since the (very weak) retail sales report captures less than half of consumer spending.

TD Securities, on the other hand, says:

Our tracking for Q1 GDP is back where we started at +0.2% q/q or 1.5% y/y, a shade under the RBA's mid-year target of 1.6%. Inventories and net exports were marginally firmer, while public spending was much weaker than we expected, effectively canceling each other out. The consensus median is +0.5% range +0.2% to +0.6% q/q.

How could it affect the AUD/USD?

Given the recent shift in RBA Governor’s view from previously giving equal probabilities to either side rate change move, not to forget the rate cut, weak GDP figures are likely to trigger the AUD/USD pair’s decline towards late-May tops near 0.6940 with 0.6900 being follow on numbers to watch.

On the contrary, a strong growth figure past market consensus and prior reading can escalate the pair’s upside to 0.7030 and the 100-day simple moving average figure of 0.7080. However, the pair’s rise past-0.7080 towards 0.7100 depends mainly on the data strength.

Key notes

AUD/USD seesaws near 0.7000 amid global growth worries, Aussie GDP in the spotlight

AUD/USD technical analysis: Aussie challenging the 0.7000 figure ahead of Australian GDP

AUD/USD Analysis: bullish case becoming more evident

About the Aussie GDP release

The Gross Domestic Product released by the Australian Bureau of Statistics is a measure of the total value of all goods and services produced by Australia. The GDP is considered as a broad measure of the economic activity and health. A rising trend has a positive effect on the AUD, while a falling trend is seen as negative (or bearish) for the AUD.