Australia Dollar Drops After Economy Declines

The Australian dollar fell today after economic data revealed that Australia’s economy contracted unexpectedly in the third quarter of this year.

Australia’s gross domestic product declined 0.5% (seasonally adjusted) in the September quarter of 2016 from the previous three months. The actual reading was far worse than the increase by 0.2% predicted by analysts. It is interesting to note that the Reserve Bank of Australia expected slower growth (though not necessarily a decline), saying in yesterday’s policy statement:

Some slowing in the year-ended growth rate is likely, before it picks up again.

AUD/USD fell from 0.7460 to 0.7450 as of 24:13 today, reaching the low of 0.7416. EUR/AUD was up from 1.4360 to 1.4399, and its daily high was at 1.4446.

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