Aussie GDP: when is it and how will AUD/USD react?

Aussie GDP overview

Australian GDP figures for 2017's final quarter will drop at 00:30 GMT Wednesday, and Aussie bulls could use some good news, but are unlikely to find any with this data release. A lopsided housing market, hobbling wage growth, and unsustainable levels of household debt are all cutting consumption spending growth off at the knees, and even the Reserve Bank of Australia has lost the lustre to their outlook for the Australian economy.

Market forecasts for Aussie GDP have year-on-year data coming in at 2.5%, a minor decline from the previous 2.8%, while analysts expect quarterly data to come in at 0.6%, the same reading as the third quarter's results. This result is looking increasingly unlikely, with key economic indicators all declining for the period, notably with a big slide in the underlying metrics for retail sales, one of the major drivers of GDP growth. 

How will Aussie GDP impact AUD/USD

The AUD has become increasingly susceptible to market sentiment lately, with little bullish data to bolster the Aussie against the US Dollar. The pair has been in a state of decline since late January, and the recent pop on market confidence has evaporated as quickly as it appeared, with the pair drifting back underneath the 200-day SMA in overnight trading just ahead of the GDP release. Gary Cohen's resignation announcement is poorly timed for Aussie bulls, with the AUD/USD fighting a losing battle against a declining trendline. A positive beat to Aussie GDP figures could see the AUD mount the 0.7800 handle and turn it into support for a later attempt for higher, while the more likely downside miss could see the pair running into the floor currently sitting at 0.7725.

Key notes:

No surprises from RBA

About Aussie GDP

The Gross Domestic Product released by the Australian Bureau of Statistics is a measure of the total value of all goods and services produced by Australia. The GDP is considered as a broad measure of the economic activity and health. A rising trend has a positive effect on the AUD, while a falling trend is seen as negative (or bearish) for the AUD.