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Australian GDP grows slightly more than expected, Q3 revised down slightly.

Written by Sam Coxhead on March 2nd, 2011.      0 comments

11:45 AM (AEST) The much anticipated Australian GDP number for the last quarter of 2010 was came out at +.7%  vs an expectation of +.6%, the 3rdQtr number was revised down from +.2% to +.1%, so it can be taken as pretty much in line with expectations. The speculative market participants obviously went into the number with bought AUD positions as we have seen a little weakness since the number was released. Recent Currency Futures market positioning reports show the market is sold the USD and bought GBP , EUR and AUD, so this would not surprise if we see a little further selling as the day continues.
Overnight saw oil and gold stronger as tensions remained high in the Middle East/ North Africa and equities were heavy with the S&P down around 1.5%. US Fed Chairman Ben Bernanke testified before the Senate Banking Committee in Washington. He acknowledged that the US economy had strengthened, but stated that the second Quantitative Easing Program would be finished in its entirety. He also said that the commodity price rises could see to some modest inflation but stated his view that the pressure would probably prove to be temporary. US Manufacturing data continues to gain pace with the ISM Manufacturing number stronger than expected and the highest level since 2004. This should come of no surprise given the weak USD. It also is not as significant as would be expected considering that Manufacturing now just makes up 15% of the US economy.
The USD staged a recovery of some sort late in New York trade that saw it make gains on all currencies. The EUR, GBP now sit on some solid support levels and the USD progress has been halted for the time being. Asian equities are weaker across the board so a “risk off” bias may play out over the coming sessions. A break down through the support levels would open up the way for a move down towards the lower end of the recent ranges on the USD cross rates.
The NZD remains under pressure across the board, as widely expected it would. This will give some kind of comfort to the exporting sector as we approach levels not seen in quite a few months. It is hard to see the NZD spiking higher for any reason in the short term, although it may get dragged along by the AUD if that manages to break through solid resistance at 1.0200-1.0220 against the USD.
          Last 24 hours trade
  Current level Pre-AU GDP Chge since AU GDP   Low High
NZD/USD 0.7469 0.7476 -0.1%   0.7462 0.7529
AUD/USD 1.0130 1.0145 -0.1%   1.0123 1.0197
NZD/AUD 0.7373 0.7370 0.0%   0.7373 0.7393
AUD/NZD 1.3563 1.3568 0.0%   1.3526 1.3563
NZD/GBP 0.4597 0.4597 0.0%   0.4612 0.4634
NZD/EUR 0.5425 0.5426 0.0%   0.5414 0.5459
NZD/JPY 61.14 61.19 -0.1%   61.08 61.84
NZD/CAD 0.7280 0.7285 -0.1%   0.7280 0.7325