Forex – Aussie Dollar Rise on Better-Than-Expected Q2 GDP Report; Dollar Slips


Forex - Aussie Dollar Rise on Better-Than-Expected Q2 GDP Report; Dollar Slips – The Australian dollar rose on Wednesday after data showed growth in the Australian economy accelerated in the second quarter of 2018.

The AUD/USD pair rose 0.2% to 0.7191 by 12:30AM ET (04:30 GMT). The Australian economy grew by 0.9% quarter-on-quarter, compared with the estimated growth rate of 0.7%, the Australian Bureau of Statistics reported on Wednesday.

Net exports contributed 0.1% points during the quarter to the GDP growth and the household final consumption expenditure increased 0.7%, contributing 0.4% points to GDP growth.

On a year-on-year basis, growth in the Australian economy accelerated to 3.4%, again beating forecasts of a slowdown to 2.8%.

The USD/CNY pair slipped 0.1% to 6.8385 as the People’s Bank of China (PBOC) set the yuan reference rate at 6.8266 vs Tuesday’s fix of 6.8183.

Meanwhile, the U.S. Dollar Index, which tracks the greenback against a basket of other currencies, was down 0.05% to 95.32. The index’s losses were largely limited as investors awaited further development in the U.S.-China trade war. The public comment period on a new round of U.S. tariffs on $200 billion more of Chinese goods were due to end on Thursday.

“Trump does what he says he’ll do in one form or another, so I expect tariffs will be implemented,” said Ayako Sera, market economist at Sumitomo Mitsui Trust Bank.

“Markets will be surprised if he doesn’t do anything,” she said.

Elsewhere, emerging market currencies were also in focus.

A monthly survey by Bloomberg on Tuesday showed that Argentina’s inflation is expected to hit 40.3% at the end of the year, higher than the 31.8% forecasted in July. The peso is expected to be trading at 41.9 against U.S. dollar by end of this year, much weaker than the expected rate of 30.5 anticipated during a July survey. The peso has plummeted 52% against the dollar this year.


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