Overnight the Australian economy observed a GDP reading of -0.3% in the three months ended March, the Australian Bureau of Statistics said, marking the first decline in nine years.
The Australian Treasurer Josh Frydenberg answered questions on the status of the country’s economic situation, if the country was already in recession, technically defined as two straight quarters of GDP contraction. Frydenberg said:
Based on what we know from the Treasury, we’re going to see a contraction in the June quarter, which is going to be a lot more substantial than what we have seen in the March quarter”
Given what he has noted this would mark Australia’s first recession since the early 1990s and end one of the world’s longest growth streaks.
What does this mean for AUD?
Despite this somewhat economic gloom for Australia, AUD continues to hold its ground. There were some thanks to Chinese data overnight; Caixin services and composite PMIs were much stronger than expectations, this helped to keep AUD and NZD propped up, preventing any excuse for a technical correction. Given these huge moves seen recently, a case for a pullback does somewhat increase. (Check out our membership to understand what we are analysing on the charts daily, fundamentally and technically)
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