The Australian dollar plummeted in Thursday’s local trading session following the disappointing GDP read for the last quarter of 2018. Opening the morning at 0.7085, any chance of breaking the 71 US cent handle was quickly erased as a 40-pip drop was seen on the Aussie as the Australian economy plunged into a per capita recession for the first time in thirteen years.
The Australian economy grew by just 0.2% in Q4 of last year, declining from the previous read of 0.3%, with the annualised read of 2.3% coming in short of 2.8% in Q3. Speculation of interest rate cuts now look to be increased as markets price in the potential of its first cut by the Reserve Bank of Australia this year since August 2016.
The AUD/USD continued to be weighed down in the afternoon of the Asian trade as eventual lows were seen at 0.7023 overnight. With a global economic slowdown continuing to dampen market expectations, trade balance and retail sales is slated for release today with the latter forecast to see a 0.3% increase for the month of January.
The Australian dollar opens this morning at 0.7030.