Falling US GDP Stats Push Up AUD USD Exchange Rate
The Australian Dollar has risen by 0.3% against the US Dollar, following a disappointing result for US economic figures.
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Australian Dollar Surges after Iron Ore Prices Take Off
Commodities news has again been a strong supporter of the Australian Dollar recently.
The AUD USD exchange rate has appreciated thanks to rising iron ore prices, which have repeatedly pushed up the Australian Dollar this week.
The latest news has seen prices rise once again, with a steady increase coming since June 25th.
US Dollar Weakened by Slowing Economic Growth
The latest high-impact US news has been broadly negative, triggering a US Dollar to Australian Dollar depreciation.
This weakening has come from the Q1 final GDP result, which has posted a slowdown compared to Q4 2016.
The first three months of 2017 saw 1.4% growth, compared to a prior 2.1%. The silver lining to this cloud was that growth was not as low as expected, having originally been forecast to hit 1.2%.
While this news might have some impact on the chances of a third Federal Reserve interest rate hike in 2017, Ian Shepherdson is not so sure. The Pantheon Macroeconomics Chief Economist has remained sceptical about the GDP impact, stating;
‘There never will be a final word [on GDP revisions], because the numbers are revised indefinitely into the future. No wonder the Fed prefers to look at payroll growth as a better proxy for the state of the economy; you can never be sure that the GDP numbers are reliable, especially when looking at short periods’.
AUD USD Forecast: RBA Rate Decision could Boost Australian Dollar
The next Australian economic movement to watch out for will be the coming Tuesday’s Reserve Bank of Australia (RBA) interest rate decision. The RBA may leave rates unchanged at 1.5%, but could still move the Australian Dollar with forecasts afterwards.
Broadly speaking, hints that the RBA may raise interest rates in the future could cause some AUD appreciation.
The next major US news is out sooner, consisting of University of Michigan consumer confidence scores.
The confidence index, due on Friday, is forecast to show a decline from 97.1 points to 94.5. This result could trigger a slight US Dollar depreciation, as it would represent the second negative data release for the US in as many days.
Recent Interbank AUD USD Exchange Rates
At the time of writing, the Australian Dollar to US Dollar (AUD USD) exchange rate was trading at 0.7669 and the US Dollar to Australian Dollar (USD AUD) exchange rate was trading at 1.3039.