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Australian dollar jumps on firmer GDP data
The Australian dollar jumped higher after better than expected domestic growth data. The economy grew 1.1 per cent quarter-on-quarter in the first three months of 2016, lifting the annual rate to 3.1 per cent.
That was ahead of expectations that had been revised higher by economists on Tuesday following the release of stronger-than-expected trade data — a major component of GDP. The GDP figure is also likely to reduce any urgency for the Reserve Bank of Australia to cut interest rates again.
AUDUSD gained 0.6 per cent to US$0.7277 after the GDP numbers.
The yen was better bid toady, firming up against the US dollar compared to Tuesday. Damp risk appetite helped the safe haven yen. Also, Japan’s Prime Minister Shinzo Abe announced his decision to delay a tax hike in Japan by over 2 years.
USDJPY traded around 110.60 yen.
There was mixed PMI data out of China. The official PMI for the manufacturing sector held steady in May at 50.1, just above the threshold of 50 that separates expansion from contraction. The gauge of activity in the services sector dropped to 53.1 last month from 53.5 in April.
That contrasted with the privately prepared manufacturing PMI survey by Caixin-Markit, which slipped 0.2 point to 49.2 from April to May, remaining in contractionary territory.
Oil prices were lower, with Brent crude, the international benchmark, down 1 per cent at $49.41 a barrel and West Texas Intermediate, the US marker, off 0.9 per cent at $48.63.
Gold, which in May had its worst monthly performance since November, swung to be 0.2 per cent lower at $1,213.50.
Sterling remained weak following a poll showing that Britons were leaning toward voting for Brexit in the June 23 referendum. GBPUSD traded around $1.4485, having fallen 1.1 per cent on Tuesday.
EURUSD was little changed at $1.1133 in early trade, keeping some distance from Monday’s 2-1/2-month low of $1.1097.
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