Australian GDP has come out much better than expected at 3% growth year on year which is rather puzzling as the Chinese economy’s credit rating has been downgraded by the credit ratings agency Moody’s.
Indeed, with the prices of commodities all having fallen over the last few months the mining industry has been really struggling so to see growth of 3% is very impressive.
The reason for the Australian Dollar strength during today’s trading session has also reinforced the decision made by the RBA to keep interest rates on hold earlier this week.
The trade deficit in Australia has also improved in January coming out better than expected.
The expectation was for AUD$3.2bn which came out at AUD$2.9bn so the combination of positive GDP as well as the lowering of the trade deficit has helped the AUD to break briefly in the 1.91 levels earlier today.
The big factor that is keeping Sterling relatively low against the Australian Dollar for the time being is the on-going uncertainty of the Brexit but as soon as the focus goes back to China’s problems this could weigh heavily on the Australian Dollar which could cause GBPAUD rates to improve.
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