- New Zealand reports 10.9% gain in dairy prices after GDT auction
- NZ commodity prices down 5.2% vs. previous 5.5% decline
- Australian economy grew by 0.2% in Q2 vs. 0.4% forecast, 0.9% previous
- Australia’s exports tumbled by 3.3% in Q2
- Spain to show 35.3K drop in employment?
What a wipeout for the Aussie! Weaker than expected Australian GDP spurred a bearish wave for AUD forex pairs, as the economy expanded by only 0.2% in Q2. Analysts expected to see a 0.5% growth figure, which is already weaker compared to the earlier 0.9% reading.
Components of the GDP report showed a 3.3% tumble in exports, due mostly to the slowdown in demand from China. This was enough to weigh on the 2.2% increase in government spending and the 0.5% rise in household spending for the quarter. Take note that this happened way before the meltdown in Chinese equities in the past couple of months!
AUD/USD dipped to a low of .6977 after the bleak growth figures were printed but quickly climbed back above the .7000 handle (+0.10%). AUD/JPY is up 56 pips after dropping to a low of 83.60 (+0.68%). The Aussie also managed to recover against its European forex rivals, with EUR/AUD down by 47 pips (-0.28%) and GBP/AUD down by 10 pips (-0.04%).
In New Zealand, the Global Dairy Trade auction recorded back-to-back gains in prices, as the index showed a 10.9% gain this week. ANZ still reported a 5.2% decline in commodity prices for August, but this marks a bit of improvement compared to the previous 5.5% decline.
NZD/USD is up 27 pips (+0.45%), NZD/JPY is up 77 pips (+1.03%), and AUD/NZD is down 22 pips (-0.22%). Chinese equities are still in the red so far, possibly keeping a lid on the comdolls’ gains.
Can risk appetite improve in the next few hours? A quick look at the forex calendar shows that we’ve got the Spanish unemployment change figure due at 8:00 am GMT and the U.K. construction PMI up for release at 9:30 am GMT. Spain is expected to show a 35.3K drop in employment, enough to erase nearly half of the 74K gain seen in July. Meanwhile, the U.K. construction index is expected improve from 57.1 to 57.6, but keep in mind that yesterday’s manufacturing PMI posted a downside surprise.
Bonnie and Clyde, peanut butter and jelly, Kanye West and Kanye West. Some things just go well together.
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