The Australian economy grew by 0.6% in Q4 2015, better than 0.4% expected. This comes on top of an upwards revision of Q3: 1.1% against 0.9% originally reported.
AUD/USD reacted with a big move to the upside, jumping above the 0.7220 level it struggled to conquer beforehand, and reaching a high of 0.7247. Further resistance awaits at 0.7280 followed by 0.7360. Support awaits at 0.7140.
Also year over year, growth figures beat with 3% against 2.5% expected and also here, it came on top of an upwards revision. Consumption led growth and this is encouraging: the economy is becoming less reliant on China. Analysts in the land down under see a successful transition away from mining: the strongest non-mining activity since the crisis.
The RBA left the interest rate unchanged at 2% this week and seemed quite calm about it. They probably had the GDP data in advance. China is experiencing yet another slowdown according to the latest data but the authorities also decided to cut the RRR. The stimulus balanced the bad news.
More: AUD: ‘Lost In Transition’; Where To Target? – CIBC