AUD/USD crawls above 0.6525 on upbeat Australia's GDP, easing risk aversion

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The Aussie Dollar pares previous losses against a softer US Dollar as concerns about global debt ease
Strong Australia's GDP and upbeat data from China are supporting the Aussie.
Later today, US Job Openings and Factory Orders figures are expected to show further signs of a weaker economic growth.

The Australian Dollar has turned positive on the daily charts after bouncing from the 0.6500 area and is trading near daily highs, at the 0.6525 area, favoured by strong Australian GDP data and easing concerns about the fiscal deficits.

Data from the Australian statistics office released earlier on Wednesday revealed that the economy grew at a 0.6% pace in the second quarter, twice as fast as the first 0.3% pace and beyond the 0.5% forecast by the market.

Beyond that, services activity data from China, Australia's major trade partner, beat expectations in August, adding to the case of a significant economic recovery of the world’s second-largest economy, and providing further support to the Aussie.

The US Dollar, on the other hand, is pulling back from its highs as concerns about fiscal deficits fade, and the market turns its focus to the US data, which is expected to show further evidence of a slowing economy and a weakening labour market.

US JOLTS Job Openings are seen declining to 7.4 million in August from 7.437 million in July and 7.771 million in June. At the same time, US Factory Orders are expected to show their second consecutive month of decline, in a sign that the impact from tariffs is starting to pinch the US economy.

Economic Indicator

Gross Domestic Product (QoQ)

The Gross Domestic Product (GDP), released by the Australian Bureau of Statistics on a quarterly basis, is a measure of the total value of all goods and services produced in Australia during a given period. The GDP is considered as the main measure of Australian economic activity. The QoQ reading compares economic activity in the reference quarter to the previous quarter. Generally, a rise in this indicator is bullish for the Australian Dollar (AUD), while a low reading is seen as bearish.

Why it matters to traders?

The Australian Bureau of Statistics (ABS) releases the Gross Domestic Product (GDP) on a quarterly basis. It is published about 65 days after the quarter ends. The indicator is closely watched, as it paints an important picture for the economy. A strong labor market, rising wages and rising private capital expenditure data are critical for the country’s improved economic performance, which in turn impacts the Reserve Bank of Australia’s (RBA) monetary policy decision and the Australian dollar. Actual figures beating estimates is considered AUD bullish, as it could prompt the RBA to tighten its monetary policy.

Economic Indicator

Gross Domestic Product (YoY)

The Gross Domestic Product (GDP), released by the Australian Bureau of Statistics on a quarterly basis, is a measure of the total value of all goods and services produced in Australia during a given period. The GDP is considered as the main measure of Australian economic activity. The YoY reading compares economic activity in the reference quarter compared with the same quarter a year earlier. Generally, a rise in this indicator is bullish for the Australian Dollar (AUD), while a low reading is seen as bearish.