On Wednesday Australian dollar lost positions against its US counterpart, as slowing GDP in Australia brought back to life expectations that interest rate reduction by the Reserve Bank of Australia could be possible.
During later hours of the Asian trade, AUD/USD pair reached 0.9556, session low and lowest since May 31st, after which consolidation followed at 0.9583. Support was expected at May 29th low, 0.9528, while the cross was expected to meet resistance at May 31st high, 0.9681.
Earlier today an official report stated that Australian Gross Domestic Product (GDP) rose by 0.6% during Q1 2013, compared to Q4 2012, below expectations for a 0.8% rise. The growth pace was identical to that of Q4/Q3 2012. In annual terms, Australias economy expanded at a slower rate, 2.5%, during Q1 2013, also below the projected 2.7%. During the previous period GDP grew by 3.1%. Activity in farming and fishing industry expanded by 2.6% during Q1, retail trade sector expanded by 2.1% and transportation rose by 2.4%. Additionally, financial sector added 2.2%, while mining industry rose by 1.5%. Insurance sector contributed to GDPs increase with 0.2%, while consumer expenditures rose by 0.6% during the first three months and contributed to GDPs increase with 0.3%.
The data came out one day after the Reserve Bank of Australia left its benchmark interest rate at a record low of 2.75%, but announced that there was still room to further reduce interest rates.
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