The Australian Dollar (AUD) briefly fell after a softer-than-expected GDP print, but strong private demand and resilient consumption helped the currency reverse losses. Net trade and inventory drawdowns weighed on growth, yet improving domestic demand keeps Australia’s recovery on track into early 2026. AUD/USD was last seen at 0.6575 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note.

AUD momentum turns bullish above 0.6570

"AUD slipped in knee-jerk reaction to 3Q GDP missing estimates (0.4% vs. 0.7% expected). But a quick look at the details showed private demand led the contributions to growth through private investment (+0.5ppt, highest since 1Q 2021) and household consumption (+0.3ppt). Public demand continued to support growth through government expenditure (+0.2ppt) and investment (+0.2ppt)."

"Net trade and changes in inventories were the components that detracted 0.1ppts and 0.5 ppts, respectively from GDP growth. Notably, ABS reported that mining inventories were drawn down to service increased export demand for coal while mining production was subdued following strength in the previous quarter."

"We still expect economic recovery to remain sustained into 1H 2026, with impulse primarily coming from domestic demand, led by resilient household consumption, rebound in services and firmer housing activities. AUD reversed losses to trade higher, despite the knee-jerk dip. Bullish momentum on daily chart intact while RSI rose. Bias to stay long. Resistance at 0.6610/40 levels before 0.67. Support at 0.6550, 0.6510 (21 DMA)."