Strong Australian GDP, Yet AUD/USD Struggles Amid Tariff Uncertainty
AUDUSD continues to be heavy, as US tariffs on China weigh, however all the flip-flop is keeping the price in a range, despite a better Q4 Australian GDP.
AUD/USD Under Pressure as Trade Tariffs Dominate Market Sentiment
The AUD/USD pair has faced persistent bearish pressure, dropping around 8 cents in Q4 2024, primarily due to U.S. dollar strength. In early February, the pair attempted another move lower, briefly falling below 0.61. However, sellers failed to sustain the downside, as a delay in U.S. trade tariffs triggered a sharp rebound, pushing AUD/USD above 0.64 later in the month.
Despite this recovery, the 100-day SMA (green) turned into resistance, rejecting price advances and sending AUD/USD back down. The Australian dollar lost over two cents, largely impacted by the implementation of U.S. trade tariffs on China, Australia’s largest trading partner.
Interestingly, AUD/USD rallied again yesterday, despite tariffs officially taking effect, as markets remained volatile with ongoing policy adjustments and investor sentiment shifts.
Australia’s GDP Beats Expectations but Fails to Move Markets
The trading day began with the release of Australia’s Q4 2024 GDP report, which showed stronger-than-expected growth. Quarterly GDP rose by 0.6%, exceeding the forecasted 0.5%, while annual GDP growth hit 1.3%, slightly above the 1.2% projection.
This data highlights the resilience of Australia’s economy despite global headwinds. However, the Reserve Bank of Australia (RBA) is unlikely to shift policy significantly based on this report, as markets are currently focused on broader macroeconomic developments, particularly trade tensions.
Market Outlook
While positive economic data suggests underlying strength in the Australian economy, trade tariffs and global risk sentiment remain the key drivers of AUD/USD. For a sustained recovery, buyers must break above the 50 and 100-day SMA, while a drop below 0.61 could trigger further downside momentum. Traders will closely watch U.S. trade policy decisions and RBA statements for the next directional move.
Australia’s Q4 2024 GDP Report – Key Highlights
- Quarterly GDP Growth: +0.6% q/q, beating expectations of +0.5% and showing an acceleration from +0.3% in Q3.
- Annual GDP Growth: +1.3% y/y, slightly above the forecast of +1.2% and improving from the previous YoY growth of 0.8%.
- Q4 Chain Price Index, an inflation measure, came in at +1.4%.
- Economic Resilience: Despite global headwinds, Australia’s economy showed stronger-than-expected growth, indicating steady domestic activity.
- Key Growth Drivers: Likely contributors include robust consumer spending, improved labor market conditions, and stronger exports.
AUD/USD Live Chart
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