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FOREX: AUD Key G10 Laggard as GDP Data Prompts Dovish RBA Repricing

FOREX
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  • The Australian dollar is the notable underperformer in G10 FX on Wednesday, following the softer-than-expected GDP data overnight. The economy grew at 0.3% SA over Q3, 20bp lower than expected, and 0.8% y/y, 30bp below expectations, according to National Accounts data.
  • For reference, the RBA has forecasted year-end GDP to print at 1.5% in Q4 within its November Statement and cash ACGBs are 4-8bps richer in sympathy. RBA-dated OIS pricing is 5-13bps softer across 2025 meetings, with analysts highlighting that a 25bps rate cut is close to being fully priced in April from May previously. As a reminder, the big four domestic banks remain split on when the central bank would begin its easing cycle, with both NAB and Westpac recently pushing out their forecasts to May as the most likely option.
  • The trend condition in AUDUSD (-1.16%) remains bearish and today’s fresh cycle low reinforces current conditions. Note that moving average studies are in a bear-mode position too, highlighting a dominant downtrend. Scope is seen for a move towards 0.6350 (Aug 5 low) and 0.6339 (Nov 10 2023 low), a key area of support.
  • Stability for the Euro has also seen EURAUD (+1.09%) extend higher, after firmly rejecting the brief slide below 1.6000 two weeks ago. We noted that this level has been a strong medium-term pivot for the cross and the inability to close below this psychological mark on a daily basis will have likely bolstered the reversal, currently trading at a 4-week high just shy of 1.64.
  • AUDNZD has also slipped back below the 1.10 handle extending its recent pullback to 200 pips. A break below 1.0965 would place the cross at a two-month low and would target trendline support just below 1.09.
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  • The Australian dollar is the notable underperformer in G10 FX on Wednesday, following the softer-than-expected GDP data overnight. The economy grew at 0.3% SA over Q3, 20bp lower than expected, and 0.8% y/y, 30bp below expectations, according to National Accounts data.
  • For reference, the RBA has forecasted year-end GDP to print at 1.5% in Q4 within its November Statement and cash ACGBs are 4-8bps richer in sympathy. RBA-dated OIS pricing is 5-13bps softer across 2025 meetings, with analysts highlighting that a 25bps rate cut is close to being fully priced in April from May previously. As a reminder, the big four domestic banks remain split on when the central bank would begin its easing cycle, with both NAB and Westpac recently pushing out their forecasts to May as the most likely option.
  • The trend condition in AUDUSD (-1.16%) remains bearish and today’s fresh cycle low reinforces current conditions. Note that moving average studies are in a bear-mode position too, highlighting a dominant downtrend. Scope is seen for a move towards 0.6350 (Aug 5 low) and 0.6339 (Nov 10 2023 low), a key area of support.
  • Stability for the Euro has also seen EURAUD (+1.09%) extend higher, after firmly rejecting the brief slide below 1.6000 two weeks ago. We noted that this level has been a strong medium-term pivot for the cross and the inability to close below this psychological mark on a daily basis will have likely bolstered the reversal, currently trading at a 4-week high just shy of 1.64.
  • AUDNZD has also slipped back below the 1.10 handle extending its recent pullback to 200 pips. A break below 1.0965 would place the cross at a two-month low and would target trendline support just below 1.09.