The Australian economy grew by 0.5% in Q4 2014, less than 0.6% that had been anticipated by economists. Year over year, the economy advanced 2.5%, which was as predicted, but lower than 2.7% seen in Q3.
This small miss resulted in an immediate move lower, but this was short lived: the pair jumped back up quite quickly.
The GDP read for Q3 was revised up to 0.4% from 0.3% originally reported. This balances the small miss in Q4.
Earlier this week, the RBA surprised by keeping the interest rate unchanged at 2.25%, contrary to expectations for a second consecutive cut to 2%. However, many suspect that the central bank will cut the rates in April or in May.
In China, Australia’s no. 1 trade partner, the HSBC services PMI came out at 52 points, marginally higher than 51.8 seen in January. Manufacturing in China is more important than services for Australia.
Opinion: AUD/USD: Ideal Sell; – Goldman Sachs
Here is how it looks on the chart:
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