- AUD/USD jumps 10 pips to clock a fresh session high near 0.7390.
- Australia’s economy chalked up a bigger-than-expected economic rebound in the third quarter.
- The US stimulus expectations keep the dollar under pressure.
AUD/USD is extending gains, with Australia’s economy staging a bigger-than-expected rebound in the third quarter.
The data released soon before press time showed Australia’s Gross Domestic Product (GDP) rose 3.3% quarter-on-quarter in the July to September period, beating the expected growth rate of 2.6% by a significant margin. The economy had contracted by 7% in the second quarter. The annualized growth rate stood at -3.8% versus -6.3% in the third quarter.
The above-forecast quarter-on-quarter data validates the Reserve Bank of Australia’s claim that the economy has been outperforming its expectations and weakens the case for additional stimulus. The central bank left key policy tools unchanged on Tuesday, having reduced the benchmark interest rate and the yield curve control target to 0.10% in November.
AUD/USD jumped from 0.7380 to 0.7390 following the GDP release, extending the early rise from 0.7362. The US Congress’ renewed push for or federal aid to business, state, and local governments facing the second wave of coronavirus has revived expectations for bigger fiscal stimulus. As such, risk assets, including the Aussie dollar, are likely to trade better bid during the day ahead.
Technical levels
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