Aussie dollar gains on weak US GDP
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Daily Currency Update
The Australian dollar is slightly stronger this morning when valued against the Greenback, currently trading at US$0.6394 at time of writing. The AUDUSD pair traded slightly higher during European trading hours on Wednesday. The Aussie pair ticked higher as the Australian dollar performed strongly despite soft Q1 Trimmed Mean Consumer Price Index (CPI) data from the Reserve Bank of Australia (RBA). The Australian Bureau of Statistics (ABS) reported that the CPI rose by 0.9% quarter-over-quarter in Q1 2025, up from a 0.2% in Q4 2024 and exceeding market expectations of a 0.8% rise. On an annual basis, CPI climbed 2.4% in the first quarter, beating the forecast of 2.2%. Australia’s monthly CPI held steady with a 2.4% year-over-year increase in March. Meanwhile, the RBA's Trimmed Mean CPI rose 2.9% year-over-year in Q1, in line with expectations, while the quarterly figure also met forecasts at 0.7%. The AUDUSD pair is showing a bullish signal, trading around US$0.6400, up 0.26% on the day. The pair is currently positioned in mid-range between US$0.6356 and US$0.6417.Key Movers
The US Dollar Index (DXY) hovered near 99.30 on Wednesday. The US economy shrank in the first three months of the year, according to official data, triggering fears of an American recession and a global economic slowdown. USGross domestic product (GDP) contracted by 0.3% in the first quarter of the year, down from growth of 2.4% in the last quarter of 2024. The contraction, the first since the start of 2022, puts the US on the brink of a technical recession, defined by two quarters of negative growth. The drop in activity comes amid a huge fall in consumer sentiment, which in April dropped 32% to its lowest level since the 1990 recession. US stocks dropped on Wednesday morning. By the end of the day, the S&P 500 and Dow Jones had eked out small gains, while the NASDAQ had dropped marginally. The major US indices all fell upon opening, but ha mostly recovered by the close. The NASDAQ was down 0.086%, the S&P 500 was up by 0.15% and the Dow Jones was in the green by 0.35%. The focus now will shift to the closely watched US Nonfarm Payrolls (NFP) on Friday, which may provide insight into the Federal Reserve's policy outlook.Expected Ranges
- AUD/USD: 0.6300 - 0.6500 ▲
- AUD/EUR: 0.5550 - 0.5750 ▲
- GBP/AUD: 2.0700 - 2.0900 ▼
- AUD/NZD: 1.0650 - 1.0850 ▲
- AUD/CAD: 0.8750 - 0.8950 ▼