Australian GDP surprised in Q2 with a strong growth rate of 1.2%, higher than expected. This helped AUD/USD settle above 0.90 and aim for the next resistance level. Update on this high yielding currency.
Australia publishes its Gross Domestic Product quite late, and doesn’t provide preliminary releases. After all the wait, the news were good:
The Australian economy grew  by 1.2% in the second quarter of 2010, significantly better than expected – 0.9%. Also the figure for Q1 was revised to the upside – 0.7%, up from 0.5% originally posted. If Q1 wouldn’t be revised to the upside, the result for Q2 would be even stronger.
AUD/USD was trading in a rather narrow range, between 0.8870 to 0.90 before the release. This narrow trading characterized other currencies. But after the release, the Aussie stood out.
It jumped towards 0.90 immediately after the release, and then continued steadily above this round number, peaking around 0.9060, 20 pips short of the 0.9080 resistance line.
A break above 0.9080 will send the pair towards 0.9135, followed by 0.9220 and 0.9327. A fall back below 0.90 will be cushioned by 0.8870.
The Australian economy continues to outshine other Western countries, and so does the high interest rate – 4.50%. Despite 6 rates hikes since the crisis, the economy slowed down only marginally.
Earlier this week, Company Operating Profits surprised with a 18.9% jump (5.9% expected), Building Approvals rose by 2.3%, despite the rate hikes that curbed the housing sector (a drop was expected).
Retail Sales also surprised with a rise of 0.7%, better than 0.4% that was predicted,and the Current Account showed a 5.6 billion deficit, better than expected. The only disappointment came from the Private Sector Credit, which rose by only 0.1%.
All in all, most indicators were great, with GDP leading the pack with an impressive growth rate. The rise in the AUD/USDis still undermined by the Australian elections that left a hung parliament. As soon as a new government is formed, the road is open for more gains.
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