Australian Dollar struggles amid weak GDP data and RBA dovish outlook
- AUD/USD holds near four-month lows near 0.6400, pressured by disappointing Q3 GDP figures in Australia.
- The RBA’s dovish expectations gain traction, with markets now anticipating rate cuts starting in April 2025.
- Technical indicators signal persistent bearish momentum with the pair holding near critical support at 0.6400.
The AUD/USD holds around 0.6435 on Thursday as the Aussie loses interest amid a backdrop of weak Australian fundamentals. Quarterly GDP growth in Australia underwhelmed traders, fueling speculation that the Reserve Bank of Australia (RBA) may commence rate cuts as early as April 2025.
On the US side, the USD is also trading the red, mainly due to soft labor market data ahead of Friday’s Nonfarm Payrolls (NFP) figures from November.
Daily digest market movers: Aussie continues weak dynamic as investors digest GDP data
- Australia’s Q3 GDP expanded by just 0.3% QoQ, falling short of the 0.4% forecast.
- Annual GDP growth slowed to 0.8%, well below the estimated 1%.
- The soft GDP print has shifted expectations for RBA rate cuts forward to April 2025, earlier than previous market consensus for May.
- On the US side, Federal Reserve Chair Jerome Powell emphasized the central bank’s cautious approach to neutral rates amidst signs of economic resilience.
- Weekly Initial Jobless Claims surged to 224,000, surpassing both the previous week’s figure of 213,000 and forecasts of 215,000.
- November Challenger Job Cuts also increased to 57,727, signaling a growing trend in layoffs.
- November’s NFPs will be key on Friday as it might trigger a recovery for the pair.
AUD/USD technical outlook: Bears maintain control as bearish momentum lingers
The AUD/USD pair remains entrenched in a bearish trajectory with technical indicators pointing to continued downside potential.
The daily Relative Strength Index (RSI) remains deep in negative territory, nearing the oversold zone, signaling strong selling momentum. The Moving Average Convergence Divergence (MACD) is firmly below the signal line, reinforcing the prevailing bearish bias. The pair is holding near the critical 0.6400 level, a break of which could open the door for further declines. Any recovery attempts may face stiff resistance at 0.6500, with stronger barriers near 0.6550.
